Commons Sitting of 22 October 1991

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
Oral Answers to Questions
  EMPLOYMENT

    Small Firms
    Mr. Bellingham: To ask the Secretary of State for Employment when he next plans to meet the chairman of Norfolk and Waveney TEC to discuss small firms.
    The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth): My right hon. and learned Friend meets Mr. Lineker regularly at meetings of the group of ten training and enterprise council chairmen. This group of regional representatives of all of the TECs considers the full range of TEC activities, including support for small firms. My right hon. and learned Friend expects to chair the next group meeting in mid-November.
    Mr. Bellingham: When my right hon. and learned Friend meets representatives of Norfolk and Waveney TEC he will be told that the TEC regards the youth training scheme as an important priority. Does my hon. Friend agree that every youngster who wants to take a place on YTS should have the opportunity to do so? Does he also agree that, particularly in today's climate, it is crucial that TECs work closely with the enterprise agencies to help small firms? Will he applaud the Norfolk and Waveney TEC's decision to contract out to the enterprise agencies the enterprise allowance scheme?
    Mr. Forth: My hon. Friend is correct. The TECs, my hon. Friend's in particular, the Department of Employment and the Government give total and absolute priority to youth training, and it is through the TECs and their excellent work that that guarantee is being delivered. We are giving young people the training that they need.
    My hon. Friend also makes an important point about enterprise. TECs are a major part of the Government's continuing effort to encourage enterprise at all levels, particularly small firms which are a strong aspect of my hon. Friend's constituency. They make a decision based on local needs on how much work to give to enterprise agencies. I pay tribute to the work of the enterprise agencies and the TECs and, in particular, the work of my hon. Friend. I am sure that he keeps in the closest touch with his TEC to ensure that it does everything possible for the local community.
    Mr. Patrick Thompson: When my hon. Friend meets the chairman of Norfolk and Waveney TEC will he take the opportunity to discuss with him business people's attitudes towards training? Does he agree that it is
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    important that business people and industrialists now set up training initiatives, particularly in engineering, to avoid future skill shortages before the problem arises?
    Mr. Forth: Yes. It will be well known to my hon. Friend that the great bulk of training has been, is and will continue to be done in the private sector by employers. However, the TECs have, as one of their main tasks, to identify training needs in each locality and to work with doneemployers to identify how that can best be done, so bringing together the efforts of the Government through TECs and the private sector to deliver the best possible quality of training. That is done, and the new investors in people initiative, launched by my right hon. and learned Friend just a few days ago, is yet another important step in emphasising the importance in the private sector of a continuing training effort, and that will continue to be the case.

    Industrial Relations
    Mr. Riddick: To ask the Secretary of State for Employment how many representations he has received in response to the Green Paper issued in July.
    The Secretary of State for Employment (Mr. Michael Howard): As of yesterday, 49 had been received. The closing date for receipt of representations is tomorrow.
    Mr. Riddick: Will not the proposals contained in the Green Paper continue the excellent work of the Government's previous trade union legislation and give more power and influence to individual citizens and individual trade union members? Does my right hon. and learned Friend believe that the Labour party's representations will be affected in any way by the recent election of a communist as the deputy general secretary of Labour's greatest paymaster, the Transport and General Workers Union?
    Mr. Howard: I am looking forward to the Opposition's representations in response to the Green Paper. There is still time for those representations to be received and I assume that the Opposition Front-Bench spokesman will be rushing away from questions this afternoon to put the finishing touches to his representations.
    My hon. Friend is right on his last point. There may no longer be room for communists in Warsaw, Prague or East Berlin. They may have been ejected from the Kremlin, but there will always be a welcome for them at Transport house.
    Mr. Skinner: Will the Minister answer this question? During the past few weeks, there have been statements that Britain has the lowest strike record for 30 years. But we have the biggest depression and recession since the end of the second world war. How can the unions, communists or any such people, be to blame?
    Mr. Howard: As a result of the laws passed by the Government, we have the lowest number of strikes for about 60 years. Is the hon. Member for Bolsover (Mr. Skinner) suggesting that the real remedy for any ills that we may be suffering at the moment is to make it easier for people to strike? Of course that is the remedy suggested by his Front-Bench spokesman.
    Mr. Summerson: Has my right hon. and learned Friend received any representations about the citizens charter

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    proposal to give members of the public the right to stop unlawful public sector strikes? Does he agree that it is high time that Labour made clear its views on that?
    Mr. Howard: Yes. That proposal has been widely welcomed and, as I said earlier, I await with eager anticipation representations on it from the Labour party.
    Mr. Tony Lloyd: Will the Secretary of State tell the House about the representation received from Conservative trade unionists? In particular, can he say whether it is accurate that they said that the balance had already swung too far against trade unions and that they, like everybody else, regard the Secretary of State as a right-wing loony?
    Mr. Howard: I am sorry to disappoint the hon. Gentleman. We have yet to receive representations on the Green Paper from Conservative trade unionsts. The hon. Gentleman is falling into the customary trap of relying on unsubstantiated newspaper reports, which on this occasion appear to have little basis in truth.

    Labour Statistics
    Mr. Win Griffiths: To ask the Secretary of State for Employment how many men and women were in full-time employment in the United Kingdom, and in each standard planning region, in June 1979 and at the latest date for which figures are available.
    The Parliamentary Under-Secretary of State for Employment (Mr. Robert Jackson): Information relating to full-time employment in Northern Ireland is not

    Civilian workforce in employment1

    Thousands

    Standard regions

    Male all

    Female full time

    June 1979

    June 1991

    June 1979

    June 1991

    South East

    4,839

    4,736

    2,006

    2,366

    Greater London2

    n/a

    2,115

    n/a

    1,137

    East Anglia

    481

    538

    178

    240

    South West

    1,032

    1,139

    417

    503

    West Midlands

    1,462

    1,329

    550

    590

    East Midlands

    1,013

    990

    393

    440

    Yorkshire and Humberside

    1,302

    1,197

    480

    521

    North West

    1,700

    1,485

    719

    692

    North

    802

    678

    314

    303

    Wales

    716

    661

    276

    287

    Scotland

    1,333

    1,228

    597

    582

    Great Britain

    14,677

    13,981

    5,934

    6,577

    1 The civilian workforce in employment comprises employees in employment, the self-employed and participants on work related government training programmes.

    2 Included in South East.

    Unemployment
    Mr. Hain: To ask the Secretary of State for Employment if he will make a statement on the current level of unemployment.
    Mr. Andrew MacKay: To ask the Secretary of State for Employment if he will make a statement on the current level of unemployment.
    Mr. Howard: Unemployment in the United Kingdom on a seasonally adjusted basis rose by 35,700 between August and September to 2,461,000. No one should underestimate the human difficulties that lie behind the
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    available. Total male civilian employment and full-time female civilian employment is available for each of the standard regions. As the reply contains a statistical table, I shall, with permission, arrange for it to be published in the Official Report.
    Mr. Griffiths: I am not surprised that the Minister did not venture to give a figure. Is not it true that employment in the United Kingdom as a whole is down by almost 1 million compared with June 1979, that in Wales there are 116,000 fewer jobs for men and that overall there are 70,000 fewer jobs in the economy? Does the Minister think that this loss of jobs and the increase in unemployment is a price that is well worth paying?
    Mr. Jackson: I am afraid that the hon. Gentleman's facts are wrong. Since 1979 there has been an overall increase of about 800,000 in the number of men and women in work. If we take as our starting point the end of the last recession, there has been an increase in Wales of 167,000. That is a 17 per cent. increase, which is well above the United Kingdom average.
    Mr. Bevan: Does my hon. Friend agree that part-time jobs are important, especially to women? Why do not the Opposition stop denigrating them?
    Mr. Jackson: My hon. Friend is right. Part-time jobs are important. It is sometimes suggested that people with part-time jobs would prefer full-time jobs. That question has been canvassed in opinion surveys, and recent surveys of part-time workers show that only 6 per cent. of them want to work full time.
    The following is the information:
    figures and I certainly do not, but September's increase was the smallest for nearly a year and is further indication that the rate of increase is slowing.
    Mr. Hain: Is the Secretary of State aware of the plight of one of my constituents, Mr. John Smith of Gwaun-Cae-Gurwen, who is aged 43 and has five children? Mr. Smith is an unemployed salesman with more than 25 years experience and has applied for 1,200 jobs in the past 19 months. Is not his plight testimony to the bankruptcy of Government policies in general and Howard's way in particular?
    Mr. Howard: Everyone must have sympathy with the hon. Gentleman's constituent and those who find themselves in similar circumstances, but I hope that the hon. Gentleman will ask himself whether the policies advocated by his party —to make it easier to strike, to embrace the proposals of the European Commission's social action programme, which would add so much in costs and burdens to British employers, and to introduce a national statutory minimum wage, which would destroy countless jobs—would help his constituent and those in a similar position.
    Mr. Andrew MacKay: Does my right hon. and learned Friend agree that those who are rightly worried about unemployment should treat strictures from Opposition Members with some caution? Surely they will recall that under every single Labour Government unemployment has steadily risen rather than fallen. As my right hon. and learned Friend just confirmed, a national minimum wage would simply lead to more people on the dole.
    Mr. Howard: My hon. Friend is correct. Under every Labour Government but one since 1929, unemployment has doubled. In the case of the one exception, it increased by 54 per cent.
    Mr. Wigley: Does the Secretary of State accept that there has been a significant change in the pattern of unemployment during the past two or three years? By now some intermediate areas have higher levels of unemployment than some of those designated as development areas. In those circumstances, when will the Government reconsider the development area strategy to help those areas that are at present intermediate but certainly need more assistance?
    Mr. Howard: These matters are constantly kept under review, but I doubt whether the hon. Gentleman's suggestion would represent the solution that he supposes to the difficulties that we are encountering at present. The answer lies in restoring our competitiveness, overcoming inflation and recreating the conditions that have led to a record creation of jobs —well over 2·5 million since 1983.
    Mr. Batiste: Is my right hon. and learned Friend aware that in constituencies such as mine, unemployment is significantly lower than it was at the time of the last election? Jobs would be put at risk if the Government adopted the policies to which the Labour party is committed, such as massive defence expenditure cuts above those already introduced, which would put the future of the Challenger tank at risk. A statutory minimum wage would also wipe out thousands of jobs in Yorkshire.
    Mr. Howard: My hon. Friend is correct in what he says. What he has identified as true of his constituency and Yorkshire would be reproduced across the country. The policies that the Labour party advances would be disastrous for employment. That is understood by my hon. Friend and, indeed, by the country generally.
    Mr. Blair: Is the Secretary of State aware of the chambers of commerce quarterly survey which will be out this Thursday and shows that jobs are continuing to be shed at an alarming rate in both the service and manufacturing industries? Does he also realise that as a result of rising unemployment and the cuts in his Department's budget, his Government are simply no longer meeting their guarantee of a training place to the
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    young and the unemployed who have been shunted in their thousands on to training queues? The Secretary of State may dispute that, but if we provide him with the evidence that these waiting lists exist, will he undertake here and now to provide the funds necessary to remove them and honour the Government's promises?
    Mr. Howard: The hon. Gentleman will know full well that the survey of the chambers of commerce of which both he and I have been provided with advance copies —it is to be published on Thursday—shows a substantial increase in business confidence on the part of those who responded to that survey. [Interruption.] Yes, I have read it. It will not do for the hon. Gentleman to deny that such encouraging evidence exists. It does him and his party no credit that he should constantly and obsessively seek to identify bad news and ignore the good news which exists in the very document that he cites as evidence.
    On the subject of training guarantees, we are delivering and are committed to those guarantees. They will continue to be made good and implemented by the training and enterprise councils which are now responsible for their implementation.

    Labour Statistics
    Mr. Flynn: To ask the Secretary of State for Employment what are the total numbers on the list of employed who are counted more than once.
    Mr. Forth: Precise information on the number of people with more than one job included in the published work force in employment estimates is not available. However, the labour force survey estimated that 724,000 people held a second job as an employee in the spring of 1990.
    Mr. Flynn: Does not the Minister's admission that some three quarters of a million people are counted twice in the employment figures—as well as trainees who are counted as though they were in full-time professional jobs, and part-timers who are counted as though they were full-timers—prove that the Government's much-parroted claims about employment levels constitute a monumental lie? Instead of running away from the rigorous examination of his policies carried out in a television studio, and instead of attacking the BBC, should not the Secretary of State try something new? Should he not adopt a novel—novel in his case, that is—approach to the employment figures, and tell the truth?
    Mr. Forth: If the rather over-the-top strictures that the hon. Gentleman has tried to apply to the Government were remotely true, they would also be true of what was done by his party when it was in government. The House should be aware that the method of counting used in this instance is exactly the same as it has been for 20 years—since 1971, if not earlier. I did not hear any of the hon. Gentleman's colleagues make the same point when their party was in office.
    When an employer-based survey method is used, as it has been in this instance, the sort of counting that I mentioned earlier will be adopted. Let me give another example. The same counting method is used in France, a country often held up by Opposition Members as a socialist ideal. Presumably, any strictures that the hon. Member for Newport, West (Mr. Flynn) applies to us will also apply to that country.
    Mr. Squire: Given the dismissive way in which the hon. Member for Newport, West (Mr. Flynn) referred to part-time jobs a moment ago, will my hon. Friend confirm that only about 6 per cent. of those in part-time work claim that they are seeking full-time work? That means that 94 per cent. of people in part-time work who were looking for such work, have found it and are happy in it.
    Mr. Forth: Indeed. My hon. Friend makes an important point, which echoes the point made so forcefully by my hon. Friend the Member for Birmingham, Yardley (Mr. Bevan).
    Opposition Members deliberately avoid the fact that the bulk of people in part-time jobs choose, and want, to work part-time. It is a matter of choice. I know that choice is anathema to Opposition Members, but Conservative Members rather want to defend choice wherever that is possible, in every aspect of Government policy. If Opposition Members do not like that, they should stand up and say so.
    Mr. McLeish: When will the ministerial team apologise to the nation for its unique record, and its unique failure in regard to labour market policies? Will the Secretary of State and his team tell us why 790,000 people have joined the dole queue in a year, why 662,000 have lost their jobs, why 43,000 fewer training places have been provided over the last year and why there are 53,000 vacancies? Will they also tell us why—most worrying of all—in a year in which unemployment rose by 800,000 in Europe, 700,000 of those people were unemployed in Britain? We have a unique recession. When will the Secretary of State start apologising to the country?
    Mr. Forth: The hon. Gentleman has outdone even his dismal record for selective quotation.
    If the hon. Gentleman wishes to make European comparisons, by all means let us do so. Socialist France, for instance, has an unemployment figure higher than ours, and the socialist Government in Spain manage to continue in office with an unemployment figure some 50 per cent. higher than ours. The more that we make such comparisons, the less we can understand why Opposition Members keep trying to use them. They are simply no good.

    Employment Action
    Mr. Atkinson: To ask the Secretary of State for Employment what representations he has received about the employment action programme; and if he will make a statement.
    Mr. Howard: I have received many favourable responses to this new programme from training and enterprise councils and others. The programme is now in operation. The first people joined it some three weeks ago. We are on course as planned to have 30,000 participants by March next year, with 60,000 helped in 1992–93.
    Mr. Atkinson: Following yesterday's welcome announcement of a new allowance for disabled working people, can my right hon. and learned Friend confirm that there will be opportunities under his proposals for disabled people—including the mentally ill and mentally handicapped—to gain work experience? Does he agree that the TUC's boycott of his excellent programme is utterly callous and irresponsible?
    Mr. Howard: I can indeed confirm that people with disabilities will be given preferential access to the employment action programme, and that they will not need a qualifying period of unemployment. Indeed, people with disabilities have generally been given higher priority on the Government's training schemes for some months now and, for the first time, have been part of the aim group.
    On the second point, my hon. Friend is absolutely right. It was disgraceful that the Trades Union Congress should boycott employment action and turn its back on those unemployed people to whom this Government are giving hope.
    Mr. Leighton: Is the Secretary of State aware that the Employment Select Committee has placed in the Library copies of letters that it has received from 60 training and enterprise councils, which tell us that they are struggling and finding it virtually impossible to implement the employment training and youth training guarantees because of a shortage of cash? In view of those letters, will the Secretary of State resist Treasury attempts to make further cuts and obtain a substantial increase in his budget from the public expenditure round so that the TECs can do their jobs properly?
    Mr. Howard: The question is about employment action. That is securely funded. Places will be provided in the way that I have suggested. We are committed to the guarantees on employment training and youth training. Those guarantees are being delivered. There can be no question other than that the TECs will have the resources that they need to deliver those guarantees in the next financial year, which is the subject of the current public expenditure survey.
    Mr. John Marshall: Does my right hon. and learned Friend find it surprising that Opposition Members are opposed to employment action that would help the unemployed, while, at the same time, they want to create unemployment through a national minimum wage?
    Mr. Howard: Very little surprises me about the Opposition, but it is noteworthy that, despite the fact that they claim to care for unemployed people, they resist almost every initiative that is designed to help unemployed people. Despite the fact that they purport to care about training, they resist almost every training initiative that this Government have introduced. Their words do not match up, nor do their words match the actions for which they were responsible when they were last in government.
    Mr. Wallace: The 30,000 places referred to by the Secretary of State pale into insignificance when compared with the rise of 230,000 unemployed since he announced employment action. When the Under-Secretary of State gave a written answer to the Chairman of the Select Committee, the hon. Member for Newham, North-East (Mr. Leighton) in June highlighting the differences between employment action and the old community programme, he omitted two very important distinctions —the difference in funding and the difference in the number of places available. If the Secretary of State is unable substantially to expand his scheme, does it mean that he lacks confidence in his scheme or that he has lost the battle against the Chief Secretary to the Treasury?
    Mr. Howard: The hon. Gentleman totally fails to take into account the range of opportunities that are now available to help unemployed people—opportunities that were not available when the community programme was in existence. There was no employment training then, nor the range of ways in which we now help unemployed people through the Employment Service. This year we shall be helping 840,000 unemployed people, over and above the help that we give to every unemployed person when he or she comes into the job centre to sign on. That is what the hon. Gentleman has to take into account if he is to make a fair comparison.

    Labour Statistics
    Mr. Pawsey: To ask the Secretary of State for Employment how many people are now employed in those travel-to-work areas situated in or adjacent to Warwickshire; and what was the comparable figure for 1983.
    Mr. Jackson: It is difficult to make the precise comparisons sought by my hon. Friend, but using the information which is available there was an increase of employees in employment in the Warwickshire area from 1,064,200 in September 1984 to 1,118,300 in September 1989.
    Mr. Pawsey: I thank my hon. Friend for his extremely helpful and interesting reply. Does my hon. Friend agree that it is pleasing that at a time of some unemployment we see the number of jobs growing in and around Warwickshire? Will he join me in congratulating local authorities, such as the Warwickshire county council, the Rugby borough council and the Warwick district council on pursuing an enlightened policy that has attracted business and industry to the county of Warwick, so reducing unemployment and increasing the number of jobs?
    Mr. Jackson: I am happy to join my hon. Friend in congratulating those local authorities. I take this opportunity also to pay tribute to the excellent work, together with the local authority, of the Coventry and Warwickshire training and enterprise council under the leadership of Geoffrey Whalen. This year they are spending £·31·28 million of taxpayers money on training and enterprise and are doing a very good job.
    Mr. Nellist: Does the Minister accept that unemployed workers in the west midlands, adjacent to Warwickshire, face almost twice the unemployment to vacancy ratio, at 37·6 per cent., as in the remainder of the country? Is not it therefore twice as hard to escape from the dole queue? Was not that position made immeasurably more difficult last week when 1,300 mining jobs in Coventry and Warwickshire were axed by British Coal?
    Will the Minister accept a short, sharp message from the miners, their families and others who face redundancy in Coventry and Warwickshire: that the best way to save jobs is to sack the Tory Government?
    Mr. Jackson: Of course, we are concerned when there are any large-scale redundancies and the Employment Service stands ready to assist. I shall inquire about what is being done by the Employment Service in the case that the hon. Gentleman mentioned. I know that it is very active in any cases of large-scale redundancies.

    Pay Regulation
    Sir John Farr: To ask the Secretary of State for Employment what proposals he has to regulate pay.
    Mr. Howard: I have no plans to introduce legislation to regulate pay. Pay is a matter best determined by the parties concerned in the light of their particular circumstances.
    Sir John Farr: Has my right hon. and learned Friend seen the report by UBS Phillips and Drew that the second stage of the Opposition's minimum wage policy would destroy 1·4 million jobs? Will my right hon. and learned Friend comment on that?
    Mr. Howard: Yes, I have seen that report and I take it seriously. Just a few days ago, the hon. Member for Sedgefield (Mr. Blair) said on the radio that the introduction of a statutory national minimum wage would not cost a single job. During our debate last Wednesday, I repeatedly offered him the opportunity to cite any independent survey that supported his assertion. Quite unaccountably, he declined to take that opportunity. He cannot cite a single survey that supports his assertion.
    Mr. McAllion: Is the Minister aware that, even without the national minimum wage, another 155 Dundonians joined the dole queue yesterday following the announcement of yet more job losses in a local manufacturing company? The company explained that it had to axe the jobs because of the continuing recession, which the Minister tells us is now over. Whom are we to believe— hard-pressed companies faced with a savage recession and forced to put workers on to the dole, or Westminster-bound Ministers, probably high on magic mushrooms, who imagine that they see economic growth everywhere?
    Mr. Howard: We are coming out of recession, but, sadly, unemployment is always one of the last things to turn as an economy comes out of recession. I regret that as much as the hon. Gentleman does, but how does it provide any justification for wantonly adding to the ranks of the unemployed by pursuing the policies advanced by the Labour party?
    Mrs. Currie: Would not a national minimum wage, instead of helping the low paid —many of whom are women—simply make low-paid work illegal? Are not there two dangers in that? The first, which my right hon. and learned Friend has already highlighted, is that many such jobs would disappear. The second is that many of those jobs would slide into the black economy, with a loss of rights for the women concerned in terms of the protection of health and safety at work, much of which is Conservative legislation. Would not there also be the loss of income tax and national insurance contributions?
    Mr. Howard: My hon. Friend is entirely right to draw attention to another real danger that would arise from the Opposition's lunatic proposals. It is far better to help those on low pay who need help by making family credit available to them, as we do.
    Mr. Blair: Will the Minister confirm that not only does he oppose Labour's proposal for a national minimum wage of £3·40 an hour, but he plans to abolish the existing wages councils, making Britain the only country anywhere in Europe—this applies also to the United States—that has no minimum wage protection? Will not 2·5 million

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    people, mainly women, lose protection at law as a result of that policy? The Minister will irrevocably stamp his party not just as the party of mass unemployment, but as the party of poverty pay.
    Mr. Howard: When I saw the hon. Gentleman rise to his feet, I hoped that he would at last provide some corroboration of his unsubstantiated assertion that his national minimum wage policy would not cost a single job. But of course he cannot do that. Instead he continues to make his misleading comparisons with countries in Europe that do not have the lunatic policy that his party wishes to foist on this country, because they know of the damaging consequences that would flow from it and because they have read the studies of the OECD, the International Monetary Fund and other bodies that have said how many jobs would be lost as a result of its introduction. We have made it perfectly clear that we do not see a permanent place for wages councils in the way in which our economy is regulated and, as the hon. Gentleman knows well, we made that clear a long time ago.

    Employment Offices (Leeds)
    Mr. Battle: To ask the Secretary of State for Employment when his Department intends to (a) reopen a jobcentre in the Leeds, West constituency and (b) provide at least one job club in the Leeds, West constituency.
    Mr. Jackson: I remember that the hon. Gentleman raised this matter in January. I have looked at it again, but, as he knows, we have no plans to reopen a jobcentre in Leeds, West. Clients in the area are served by the integrated jobcentre at Stanningley. Jobcentre facilities are available in nearby Pudsey, Yeadon and central Leeds. We do not have plans for a job club in Leeds, West because constituents can use the job club facilities at Pudsey jobcentre, which is within easy travelling distance, and in central Leeds, where facilities are being extended following my right hon. and learned Friend's announcement on 19 June about extra job club places.
    Mr. Battle: Is the Minister aware that in a written question on 26 February 1981 one of his predecessors promised the House that he would defer the closure of jobcentres until unemployment fell? Is he further aware that unemployment in my constituency rose by 42 per cent. between last September and this September? Will he confirm that people who have to travel from my constituency to visit job clubs and jobcentres have to pay for that? What action will he take to provide a service to my unemployed constituents, or is he trying to pretend that they do not exist?
    Mr. Jackson: We make no such pretence. For the enlightenment of the House, I must say that the nearest jobcentre at Stanningley is only one and a half miles away from the hon. Gentleman's constituency. I do not think that he has a good case. The services that are provided by jobcentres are being much improved. Hon. Members who visit their jobcentres—I hope that they all do—will know that that is true. They are being improved in the hon. Gentleman's area and I do not believe that he has a fair ground for complaint.
    Mr. Battle: On a point of order. Mr. Speaker. In view of the unsatisfactory nature of the reply, I give notice that I intend to raise the matter on the Adjournment.

    Unemployment (Crewe and Nantwich)
    Mrs. Dunwoody: To ask the Secretary of State for Employment if he will visit the Crewe and Nantwich constituency to discuss the unemployment figures for May and June.
    Mr. Forth: My right hon. and learned Friend the Secretary of State has no immediate plans to visit the area. There were 3,851 unemployed claimants in the Crewe and Nantwich constituency in September 1991, which is more than 33 per cent. fewer than in September 1983, when unemployment was at its peak in the constituency.
    Mrs. Dunwoody: Is the Minister aware that my constituency has one of the most rapidly rising unemployment rates and that, despite the desperate need for rolling stock, firms of the quality of British Rail Engineering Ltd. cannot fill their order books? Rolls-Royce Ltd., which has a history of providing high-quality engineering, shut down at extremely short notice without any indication that this would be the last layoff between now and Christmas. What hope does he have for the employees of those companies or for people who are desperately looking for employment?
    Mr. Forth: I can well understand the hon. Lady's concern about the extent of the job losses that her constituents have experienced. That concern is widely shared, not least among my colleagues and myself. She asked for hope. Between April and September 1991, almost 80 per cent. of the 1,700 restart interviewees in the Crewe area found either jobs, training or other positive outcomes. Job clubs in Crewe have helped 98 people into jobs since April, and the South and East Cheshire TEC— one of the most dynamic and successful TECs—is fully operational in her area. It is well understood by Conservative Members that 50 per cent. of people who unfortunately lose their jobs, including in the hon. Lady's constituency, find themselves back in employment within three months. That is something positive for people to look for. We shall do all that we can to help them to do just that.

    Youth Training
    Mr. Amess: To ask the Secretary of State for Employment how many Government training places were available for young people aged 16 to 18 years in (a) 1978–79 and (b) currently.
    Mr. Howard: In England and Wales in 1978–79 there were on average about 6,000 young people receiving training in the youth opportunities programme compared with 260.000 now in youth training.
    Mr. Amess: Will my right hon. and learned Friend confirm that 89 per cent. of the people who complete youth training go straight into jobs or on to further education —a far better start than Labour was ever able to provide? Will my right hon. and learned Friend also confirm that it is wrong for local socialists to say that the Government do not guarantee training places for our young people in Basildon?
    Mr. Howard: I can confirm both points. It is true that 89 per cent. of those who complete youth training go into jobs or on to further education. Some 68 per cent. do so with a qualification. That is a measure of the improvement in the quality of the training opportunities now available to our young people. I can confirm also that the guarantee is being met in Essex. Recently, we made additional resources available to the Essex training and enterprise council to ensure that the guarantee was fully met.
    Mrs. Fyfe: The Secretary of State seems to think that he gave a full reply to the question, but he gave information on only England and Wales. Does he recall that this is supposed to be a United Kingdom Parliament? Will he therefore give the figures for Scotland?
    Mr. Howard: The latest figures for Scotland are not yet available because the local enterprise companies in Scotland have not made them available to the Scottish Office. I shall ensure that the hon. Lady gets the figures as soon as possible.
    Mr. Anthony Coombs: Is my right hon. and learned Friend aware that Central Employment Recruitment and Training Ltd. in my constituency was the first organisation to get an employment action scheme up and running and that that has proved to be a valuable scheme? Is not it an absolute disgrace that, faced with the largest youth training programme in Europe and with employment training and the employment action scheme, the only reaction of the Transport and General Workers Union —which sponsors the hon. Member for Sedgefield (Mr. Blair)—was to boycott those programmes?
    Mr. Howard: My hon. Friend is entirely right. We are still waiting for a single word of criticism to pass the lips of the hon. Member for Sedgefield (Mr. Blair) and the Leader of the Opposition—both of whom are sponsored by the TGWU—about that union's disgraceful decision in July to boycott youth training, employment training and the training and enterprise councils. Those are the men who are supposed to galvanise the nation. They cannot even persuade their own trade union to turn its back on that disgraceful boycott.

    Unemployment
    Mr. Hinchliffe: To ask the Secretary of State for Employment if he will make a statement about the level of unemployment in Yorkshire and Humberside.
    Mr. Jackson: Seasonally adjusted unemployment in the Yorkshire and Humberside region was 220,000 in September 1991. This represents 9·1 per cent. of the region's work force. Unemployment in September was 74,000 lower than at its peak in July 1986.
    Mr. Hinchliffe: Bearing in mind the fact that the Wakefield area alone has lost about 20,000 mining-related jobs since 1979, what assessment have the Government made of the implications for employment prospects in that area of the delay in constructing the channel tunnel rail link to Yorkshire? Is not it disgraceful that the Government appear to be more concerned with the interests and problems of certain Tory marginals in London than with the employment potential of thousands of jobs in the north of England?
    Mr. Jackson: I shall draw the hon. Gentleman's question to the attention of my right hon. and learned Friend the Secretary of State for Transport because it relates to his Department. As for my Department, I have already said in answering the hon. Member for Coventry, South-East (Mr. Nellist) in relation to large-scale redundancies in the coal mining industry that I shall ensure that the Employment Service is providing a full service in this case, as in all other cases of large-scale redundancies.

    Stoppages
    Mr. Jessel: To ask the Secretary of State for Employment how many stoppages occurred in the 12 months to December 1990; how many in the previous 12 months; what was the annual average in the 10-year period ending December 1989; and if he will make a statement.
    Mr. Forth: There were 630 stoppages in the 12 months to December 1990, 701 in the previous 12 months and an annual average in the 1980s of 1,129. Provisional figures for the year to August 1991 show there have been 420 stoppages, the lowest number of any 12-month period since the year to April 1934.
    Mr. Jessel: Is not it a tremendous benefit to the country that, as a result of action taken by the Conservative Government, strikes are practically a thing of the past? Does my hon. Friend remember the last year of the Labour Government—the winter of discontent—when strikers in the national health service stopped sick people getting into hospital, dead bodies went unburied and verminous refuse was left in the streets?
    Mr. Forth: I am grateful to my hon. Friend for reminding the House of those factors. The 1·9 million working days lost in 1990 were a quarter of the average for the 1980s and one seventh of the average for the 1970s. That must be not only a tribute to the legislative programme pursued by the Government through the 1980s, hut, I suspect, one of the main reasons for the enormous inflow of investment and jobs which expressed the confidence of people abroad, even if we do not have it from the Opposition.

  PRIME MINISTER

    Engagements
    Dr. Twinn: To ask the Prime Minister if he will list his official engagements for Tuesday 22 October.
    The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): I have been asked to reply.
    My right hon. Friend the Prime Minister is returning from a highly successful performance at the Commonwealth Heads of Government meeting in Harare.
    Dr. Twinn: Will my right hon. Friend take time today to consult our right hon. Friend the Secretary of State for Defence about the effects of a 27 per cent. cut in the defence budget? Will he further consult about the effects —especially on Scottish regiments—of a 50 per cent. cut in the defence budget?
    Mr. MacGregor: I think that my hon. Friend is referring to the policies of the Labour and Liberal parties on defence. The Labour party's conference proposals, which a future Labour Government would be pressurised into accepting, would mean defence cuts of about £6 billion —[Interruption.];
    Mr. Speaker: Order. The Leader of the House must put his own interpretation on the question.
    Mr. MacGregor: He is also answering the question. That would be more than the nation spends on the Army and Navy together. The Liberal's proposals would mean a cut in the Army of nearly 50,000 men below the level set out in "Options for Change". That is the equivalent of no Scottish regiments and no soldiers from Scotland. I hope that the whole nation and especially those with interests in defence and defence jobs will note the consequences of their policies and the contrast with ours.
    Mr. Kinnock: Will the right hon. Gentleman take this opportunity to agree with the Secretary of State for Health in repudiating tax relief on private health insurance for the over–60s, or does he agree with the Chancellor of the Exchequer that the scheme should be commended as
    "definitely a way of getting more resources into the Health Service."—[Official Report, 12 July 1989; Vol. 156, c. 1024.]
    Mr. MacGregor: My right. hon. Friend was making it clear that he did not believe that there should be an extension of that particular scheme. Obviously, tax proposals are a matter for my right hon. Friend the Chancellor.
    Mr. Kinnock: The right hon. Gentleman's memory is not serving him well. Just 48 hours ago the Secretary of State for Health said that he would not be at all surprised if the whole scheme was dropped in the next Budget. I remind the right hon. Gentleman that over a three-year period the Government are spending £150 million on supporting private health insurance. Would not that sum be better spent on maintaining and improving services in the national health service for elderly patients who are being hit by the closure of geriatric wards?
    Mr. MacGregor: The right hon. Gentleman knows that the figure is £60 million. Perhaps he should now answer the question that was put repeatedly yesterday and that has not been answered. How does the Labour party propose to fund and find the additional £650 million which would result from its changes in policies on charges, contracting out and the minimum wage? Those policies would reduce patient care and the Labour party refuses to answer.
    Mr. Kinnock: Will the right hon. Gentleman, deputising for the Prime Minister, now answer the question that I asked him? The Secretary of State for Health has repudiated the private scheme. The Chancellor of the Exchequer supports the scheme. What does the right hon. Gentleman think? Does he agree that the money would be better spent in the national health service helping the elderly with their needs instead of funding private health insurance?
    Mr. MacGregor: I have already made it clear that what my right hon. Friend said was that he did not believe that there should be any extension of the scheme. The point is that the £60 million being devoted to the scheme is very
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    small compared with the £650 million that would be taken away from patient care as a result of the Labour party's changes in policy.
    Mr. Michael Brown: To ask the Prime Minister if he will list his official engagements for Tuesday 22 October.
    Mr. MacGregor: I have been asked to reply.
    I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Brown: Will my right hon. Friend reflect today, as we complete the 12th Session of this Government, that after those 12 years, 1·4 million people now own their council homes and 9 million people are now shareholders for the first time? Will my right hon. Friend confirm that those people will look forward to the Prime Minister's proposals for the reform of inheritance tax? Will he condemn those who oppose that reform, who are displaying not only the politics of envy, but the politics of revenge?
    Mr. MacGregor: I agree entirely with my hon. Friend. One of the many great achievements of the 1980s has been the big increase in and wider spread of ownership throughout the community. It is no wonder that the Labour party looks to inheritance tax as a means of financing its high-spending policies. As my hon. Friend points out, Labour opposed all the policies that have brought about the greater increase in home ownership and the much wider spread of share ownership.
    Mr. Cousins: Is not it disgraceful that neither the Prime Minister nor any Cabinet minister has met representatives of the people and the police from Newcastle upon Tyne, where every day police and fire officers face more incidents than anywhere else in Britain, where every day, because of poll tax capping, care, schools and youth clubs are being cut and where every day, old people and women face a relentless campaign and a wave of crime and harassment? Is not that the real city challenge and have not the Government failed?
    Mr. MacGregor: It is this Government who have constantly increased resources to the police, who have put police pay on a competitive level, who have considerably increased the numbers of police, who have supported them in all the difficult tasks that they do and who throughout have taken many steps to deal with the sort of problems that the hon. Gentleman mentions. It is this party which has put substantial resources and substantial support behind them.
    Mr. Allason: Has my right hon. Friend read early-day motion 1286 on today's Order Paper? Will he ask the Prime Minister, as head of the security and intelligence services, to order an immediate inquiry into the alleged relationship between the Israeli intelligence service and Robert Maxwell and especially Mr. Nicholas Davies, the news editor of the Daily Mirror?
    Mr. MacGregor: If any questions are raised about export sales to Iran—about this issue—which justify an investigation by the Department of Trade and Industry and any evidence is provided, I am sure that it will do so.
    Mr. Ashdown: Does the right hon. Gentleman feel any remorse at the fact that, over the next few months,

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    thousands of business men and tens of thousands of their employees will pay with their jobs and their livelihoods for the Government's economic mismanagement?
    Mr. MacGregor: The right hon. Gentleman knows that the most important way to ensure long-term prosperity and competitiveness is to get inflation down to competitive levels, as we have succeeded in doing. The right hon. Gentleman also knows that. throughout the 1980s, we saw substantial increases in the number of new businesses that have lasted, in the number of growing businesses and in new jobs. Of course, we regret the increase in unemployment, but I believe that it is our policies that will give us the path for growth in the 1990s that we had in the 1980s. It is important to recollect that about half those who become unemployed find a new job within three months. The policies that we have been pursuing have enabled that to happen.

    York
    Mr. Gregory: To ask the Prime Minister if he has any plans to make an official visit to York.
    Mr. MacGregor: I have been asked to reply.
    My right hon. Friend the Prime Minister is to make a series of visits to all parts of the country and very much hopes to include York.
    Mr. Gregory: My right hon. Friend will no doubt recall the campaign by animal lovers in York and, in particular, by the York branch of the Royal Society for the Prevention of Cruelty to Animals, to outlaw the export of live horses. Will he accept the grateful thanks of all those involved for the determined stand taken by the Ministry of Agriculture, Fisheries and Food last night, to ensure that our national rules continue and that such deplorable exports do not take place?
    Mr. MacGregor: I am well aware of the feelings in York. All hon. Members—certainly Conservative Members—are well aware of the concern felt by many at the possibility of changes in relation to our existing trade in horses policy, especially our restrictions on the export of live horses for slaughter. I am sure, therefore, that the whole House will wish to congratulate my right hon. Friend the Minister of Agriculture, Fisheries and Food on securing a most successful outcome to the Community negotiations and on ensuring that our policies on that issue can be maintained.
    I would go further. On the directive as a whole, there is no doubt that the United Kingdom has taken the lead in ensuring proper welfare safeguards in the transport of animals and that we have achieved significant improvements. That shows the high priority that we have attached to the matter.

    Engagements
    Mr. Morgan: To ask the Prime Minister if he will list his official engagements for Tuesday 22 October.
    Mr. MacGregor: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave a few moments ago.
    Mr. Morgan: Following the statement by the Secretary of State for Health to the House yesterday, to the effect that it was illegal for NHS patients to be charged for services —except for the three categories prescribed by law —what redress does the right hon. Gentleman, who is standing in for the Prime Minister today, suggest to my constituent, Mr. Charlie Harding of Ely, who was charged £100 for his nebuliser by Llandough hospital's chest medicine department and who is still paying £32 a year for the nebuliser to be maintained? Mr. Harding was torpedoed during world war 2 and is now being torpedoed again by this two-faced Government, who say that charging is wrong but who do not do anything about it? What redress does the right hon. Gentleman have in mind to help Charlie Harding get his money back?
    Mr. MacGregor: I understand that the health authority has provided the nebuliser on loan and the hon. Gentleman will know —
    Mr. Morgan: It is a different case.
    Mr. MacGregor: In one particular case, the equipment has been provided on loan. With regard to other cases, I wish to make the position absolutely clear. My right hon. Friend the Secretary of State has made it clear that there will be no charges for patients on the national health service and we will look at cases where payments have already been made.
    Mr. Brandon-Bravo: Like my hon. Friends, I know that my right hon. Friend very much welcomes the statement by the Secretary of State for Health yesterday, especially with regard to our additional provision for residential homes. Will my right hon. Friend note, comment upon and compare our caring approach on residential homes with the approach of the Labour party, whose friends in Nottinghamshire have spent the past six months trying to close the 12 homes in our county?
    Mr. MacGregor: I agree with my hon. Friend. The policies that we have been pursuing in respect of care in the community, which includes residential homes, have very considerably improved the care and resources devoted to such elderly residents. I am sure that all hon. Members will welcome the additional resources—well above the level of inflation—that my right hon. Friend the Secretary of State for Social Security announced yesterday for them.
    Mr. Canavan: To ask the Prime Minister if he will list his official engagements for Tuesday 22 October.
    Mr. MacGregor: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Canavan: Will the Leader of the House now settle the dispute between the Secretary of State for Health, who told the House yesterday that it is illegal to charge national health patients for fertility treatment, and the Scottish Office Minister with responsibility for health, who claimed that it is perfectly legal? No matter who is right or wrong with regard to the legal technicalities, will the Government intervene now to ensure that such treatment is available free on the NHS?
    Mr. MacGregor: The position is absolutely clear. It is illegal for the NHS to charge NHS patients except in the limited respects allowed by statute. The NHS has, of course, never provided every service in every area. It is up

    795
    to local health authorities to decide local priorities—[HON. MEMBERS: "Ah!"] That has always been the case and it was the case under the previous Government. There is nothing. unusual about that. As I said to the hon. Member for
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    Cardiff, West (Mr. Morgan), if there are specific examples of NHS bodies overstepping the law, we shall investigate them

MV Antares
3.31 pm
Mr. Martin O'Neill (Clackmannan) (by private notice): To ask the Secretary of State for Defence if he will make a statement about the determination on the MV Antares.
The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Kenneth Carlisle): The sheriff principal of North Strathclyde published this morning his determination following the fatal accident inquiry that he conducted after the terrible accident on 22 November last year involving the fishing vessel Antares and the submarine HMS Trenchant, which was on a submarine commander's training course. We are now studying this very detailed determination.
The sheriff principal concludes that Antares sank as a direct result of HMS Trenchant snagging her fishing gear, and that this led to the tragic deaths of the four crew members of the Antares. This conclusion is similar to that of the Royal Navy's own board of inquiry. We have already expressed our very deep regret at this awful loss of life and I do so again. I understand what an irreplaceable loss this was to the families of the four men and indeed to the whole community of Carradale.
The sheriff principal concludes that the accident was caused by human error on board HMS Trenchant. The Royal Navy will consider whether disciplinary action is right once the Crown Office has decided whether to take any further action. The House will understand that I cannot comment further on this point.
We attach very high priority to the safety of fishing vessels in the vicinity of dived submarines and we recognise that fishermen are very anxious after the loss of the Antares. In the light of this tragic accident, we have already made a number of changes to training and procedures, showing our determination to ensure that submarine operations conducted in the Clyde are as safe as possible.
We are now giving urgent consideration to all the recommendations made in the sheriff principal's detailed report. His most urgent recommendation is that a 3,000 yd mandatory separation zone should be established around fishing vessels. I can tell the House that, in view of our wish to take every measure we can to improve the safety of shipping, we are with immediate effect increasing from 2,000 to 3,000 yd the distance by which dived submarines should be separated from vessels which are fishing—navigation and shipping constraints permitting. Instructions have already been sent out to this effect and will apply throughout United Kingdom waters. We shall consider the sheriff principal's other recommendations as quickly as we can.
I note that the sheriff principal commented that the need for submarines to train for their operational role is not in question. We must ensure that our submariners are properly trained to operate in coastal waters so that they can operate effectively in wartime. Those who serve in our submarines value good relations with the fishing community and share to the full our sense of grief at the loss in this tragic accident. We believe, however, that the needs of the Royal Navy and the interests of fishing communities can be accommodated, and we are determined to achieve this.
Mr. O'Neill: I thank the Minister for his statement. I join him in expressing the sympathy of the whole House for the bereaved families who, once again, have been brought face to face with the tragedy that confronted the community of Carradale.
Opposition Members recognise the importance of the training of submariners. They must live alongside fishermen who, with the greatest respect to the Royal Navy, have lived in the area a good deal longer than the Navy has. We recognise also that the timely response in extending the area from 2,000 to 3,000 yd will be welcomed and that it will assist in ensuring greater safety.
What steps is the Minister taking to ensure that the tactic, which is widely alleged by fishermen, of submariners using fishing craft as camouflage when they are diving does not happen again? In the light of the sheriff's statement and the statement of the Royal Navy board concerning the procedural and personal failings that took place, will he guarantee to take whatever disciplinary steps are felt appropriate by the Crown Office? Will the Minister take the necessary steps to ensure that the United States and Soviet navies, which also use those waters for whatever purposes, are made aware of the new regulations and of the need to ensure that the safety of our fishermen is just as important as the training of our submariners?
Mr. Carlisle: I am grateful to the hon. Gentleman for his remarks. I am grateful also that he understands the importance of training. We recognise that we must do everything possible to give confidence to local fishing communities. I assure the hon. Gentleman that we do not use fishing boats for camouflage. One of the things that we have done since the accident is to get far better communications with the Clyde Fishermen's Association. It now has notification of our submarine movements. Our intention is to explore every avenue to improve those communications and relations.
I assure the hon. Gentleman that, if the decision of the Crown Office is not to take legal action, we will consider carefully what disciplinary action we have to take. We have to await the outcome of the Crown Office's consideration. I assure the hon. Gentleman that those measures will apply to all our submarines. We are determined that safety should be a priority in the Clyde area.
Mr. James Wallace: My hon. Friend the Member for Argyll and Bute (Mrs. Michie) is ill today; otherwise, she would deal with this matter, which involves the loss of life of some of her constituents. I add my condolences to those that have already been expressed.
The advance notice that I now understand is in place for the Clyde Fishermen's Association is welcome, together with the Minister's statement that the zone is to be extended to 3,000 yd. Given that, last week, he was able to announce a significant reduction in low flying, will he undertake to consider whether there is an opportunity significantly to reduce the number of training exercises which need to be done, particularly in areas where there is considerable fishing activity?
Although human error has been identified in this case, much concern has been expressed in the House and outside, even before the loss of the Antares, that such events were happening. Trawlers were having their nets snagged by diving submarines. Will the Minister examine whether human error has been at fault and whether, in

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part, that has been brought about by a system that leads to that human error—in fact, it is a system operated by the Ministry of Defence—rather than put the blame on one or two individuals?
Mr. Carlisle: The hon. Gentleman recognises that it is important to spread the training. One of the recommendations of the report is that we should look at relocating training to other coastal areas in the United Kingdom. We will obviously give that matter considerable thought.
In answer to the point about general safety and notification, we have sent a list of all our submarine movements to the fishermen. We talk to them carefully about what we are planning to do and shall see whether we can extend that practice even further.
Mr. Bill Walker: My hon. Friend will be aware that nothing that we say today can in any way reduce the pain and loss that the families concerned are experiencing or can bring back those men, so surely the important thing is to recognise that there are real lessons to be learned and that those lessons must be put into practice. The submariners and the fishermen recognise that they must live and work together in the same waters and, as the Clyde Fishermen's Association has clearly demonstrated, they ask simply for an arrangement that makes it safe for the fishermen to carry out their duties while the submarines are also safe, and allowed to do what they have to do if they are to be up to the job that is required of them in time of war.
Mr. Carlisle: My hon. Friend makes a good point. He might be interested to know that, in 1990, the Ministry of Defence started to produce a publication entitled "Fishing Vessel Avoidance: Flotilla Guidance" which is continually updated and seeks to instruct submariners about how to look out for fishing and other vessels. We shall continue to update it. As part of his training, each submariner now spends a day on a fishing vessel so that he can be fully up to date with fishing equipment and methods.
Mr. John McFall: The House should note that meaningful dialogue took place between the Clyde fishermen and the MOD only after that tragic accident. Given that the limit of 2,000 yd between submarines and fishing vessels was in force at the time of the accident, is the Minister aware that, after 2 am on 22 November, HMS Trenchant moved towards the fishing vessel, and that the fishing vessel had capsized before 2.18 am? Therefore, the accident happened despite that rule being in force.
What assurance, therefore, can the Minister give us now that the new procedures will stop what is commonly referred to in the Clyde as "snuggling up" by the submarines, so that their noises are obliterated by those of the fishing vessels? Does the Minister agree with the sheriff principal's report that submarine warfare training in the Clyde is incompatible with fishing activities?
Mr. Carlisle: Many of those matters were mentioned in the report. There is no question of submarines "snuggling up" to fishing vessels. There has always been a principle of separation and, as the hon. Gentleman knows, we have now extended that separation to 3,000 yd. That was a quick response to the report, which we were glad to make.
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On the night of the incident, HMS Trenchant surfaced carefully and as quickly as she could. She spent two hours searching and then, having convinced herself of the position with all the details at her command, returned to her exercises. That matter is dealt with in the report. We must consider whether that was the right practice and how we can revise our operations should such an unfortunate occurrence happen again. Obviously, that matter is given detailed consideration in the report.
Mr. Alex Salmond: Does the Minister accept that a policy that allows submarine exercises in fishing waters is inherently dangerous, and that whatever the catalogue of human errors that were immediately responsible for the tragedy, that policy cost the lives of four fishermen? Why does the Minister seek to misrepresent the views of the sheriff principal who, far from conceding operational reasons for exercises in fishing waters, said exactly the opposite—that no evidence was led to justify that? Furthermore, will the Minister now institute an instant ban on submarine activity in Scotland's fishing waters?
Mr. Carlisle: Aspersions like that do no service to the seriousness of this matter. We must address these matters with the utmost care. The basic principle is that our submariners are highly skilled, dedicated people, who ply a difficult operation with considerable courage. If they are to be effective in war, it is essential that they can practise in coastal areas. As I have said, we try to give as much warning as possible to fishing vessels and to give them information about all our movements. As I have said, however, the important principle is that such training is absolutely essential if we are to have an effective submarine force.
Mr. Jonathan Sayeed: Is my hon. Friend aware how welcome it is to hear a Minister from the Ministry of Defence facing up to the responsibilities accepted by the MOD? As one who has been to sea in both conventional and nuclear vessels, I know how difficult it is, using even the most modern sonars, to note where nets are. Often those are large drift nets on fishing boats which are drifting. What is being done to investigate the use of sonar reflectors on such nets and other matters instituted by the MOD before the sheriff principal's report so that the possibility of such tragic accidents is reduced in future?
Mr. Carlisle: I am grateful to my hon. Friend for his remarks. The House might be interested in two technical matters. First, the submarines have new VHF transceivers to improve the command and control arrangements. We are also making headway in the application of pingers to nets. We have drawn up technical specifications and distributed those to interested companies. We are now moving towards trials, details of which will be discussed with the Clyde Fishermen's Association. We hope to have a trial some time this winter.
Mr. George Foulkes: Will the Minister accept that the sheriff's main recommendation that the submarine exercises should be held in the vast areas of the sea in which fishing does not take place was suggested to the then Secretary of State for Defence, the right hon. Member for Ayr (Mr. Younger). more than two and a half years ago by some of my colleagues and myself? If it had been accepted then, the men crewing the Antares would be alive today.

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Why can the hon. Gentleman not accept that recommendation now? In memory of the men who died on the Antares, will he call off the naval exercise scheduled for the Clyde next month, which is a replica of the exercise in which they died? Otherwise, it will be an insult to the memory of those brave men.
Mr. Carlisle: The sheriff principal fully accepted the need to train in coastal waters. [HON. MEMBERS: "No."] He fully accepted that need. He knew that the Navy had to have that training. However, as I said, he has recommended that we should spread training more widely to other coastal areas, and we shall consider that carefully, together with our studies of the report.
Several Hon. Members rose—
Mr. Speaker: Order. I have to have regard to the subsequent business and this is an extension of Question Time. I shall take two more questions from each side of the House and then move on.
Mr. Peter Viggers: Taking up a point made by Opposition Members, does my hon. Friend agree that much defence work is inherently dangerous, which is why so much scrupulous care is put into the training and operation of submarines? Does my hon. Friend also agree that the submarine service believes that it can be justifiably proud of its safety record but will welcome the extension of the safety zone, which should make safety still greater?
Mr. Carlisle: The Royal Navy was as distressed as anyone else by the tragic accident to the Antares. The Royal Navy is determined that it should operate and train safely. Therefore, as I have said, following the tragic accident, we have introduced a range of measures which should make and are making training safer and, following the inquiry, we shall extend those measures. I can assure my hon. Friend, who represents a naval community with great care, that the Royal Navy wants to get it right and wishes to ensure that, in its vital training, an accident of this nature does not happen again.
Mr. Brian Wilson (Cunriinghame, North): Will the Minister accept the deep sense of hurt that there will be that again a Minister has come to the Dispatch Box who does not have a background in this incident and who has repeated many of the mistakes which were made by the then Ministers at the Dispatch Box in the days after the Antares incident?
Does the Minister realise that people in fishing communities around the country are certain that, if a blind bit of notice had been taken of the many similar incidents reported to the Ministry of Defence over the years, and if the Ministry had reacted sensitively and sensibly to those reports instead of arrogantly ignoring all the points put to it, the tragedy could not have happened?
In the light of that truly horrific background of neglect when matters had been brought to the Government's
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attention, do the Secretary of State and the Minister not agree that it is now incumbent upon the Ministry of Defence to show some humility and to accept in full and without delay Sheriff Principal Hay's recommendations on the Clyde and to extend exactly the same principle to other coastal waters around Britain?
Mr. Carlisle: The hon. Gentleman has not been listening. I stated categorically the measures that we have taken since the tragic accident, and they are not insignificant. I have also announced an extension of the separation distance from 2,000 to 3,000 yd. We have had the report for only a day or two, and because of safety considerations, our action has been speedy. I do not accept what the hon. Gentleman says.
In addition, I have said that we shall study the report in great depth and introduce any further necessary measures.
Mr. Ian Bruce: My hon. Friend will know that there is a great deal of naval activity around my constituency, which emanates from the submarines which exercise from Portland. There is also a large fishing fleet. I hope that the Ministry will in no way look for scapegoats among the crew of the nuclear submarine. I had the privilege of seeing some of those very personnel in action, and I can vouch for their professionalism.
Perhaps we should devote the absolute maximum effort, as we did in the Gulf war, to finding a suitable way for submarines to detect nets, because there will always be problems where fisherman and submarines are together. Portland has a wonderful Admiralty research establishment, and I am sure that, if it were given the task of tackling that problem, it would do so with vigour.
Mr. Carlisle: I am grateful to my hon. Friend for his tribute to the dedication of submariners. On the wider national scene, we consult the fishing industry safety committee, which has a national interest in this matter. We are also willing to talk to any other fishing association on our coasts. We want training to be as safe as possible. We value good relationships with fishing organisations and wish to ensure that both naval training and fishing can live in harmony.
Mr. Calum Macdonald: The Minister mentioned notification agreements. While the ideal solution is completely to separate submarine activity from fishing activity, would the Minister consider extending the existing notification arrangements beyond the Clyde area and the areas that are now covered to include all the fishing waters off the west coast? That should now be a matter of urgency.
Mr. Carlisle: Obviously, we will be happy to look at that matter and at any other issues that the hon. Gentleman, with his interest in this area, wishes to send to my Department.

Points of Order
3.53 pm
Several Hon. Members rose
Mr. Anthony Steen: On a point of order, Mr. Speaker.
Mr. Speaker: Is it to complain that I did not manage to call the hon. Gentleman?
Mr. Steen: No. I lost a fishing vessel off Dover and I want to put a question to the Minister. I cannot put a question down —
Mr. Speaker: Order. That would have widened questions on the statement, which is about the Antares report. This is an extension of Question Time, and with the best will in the world I am afraid that it is not possible to call every Member who wishes to ask a question outside the ambit of the statement.
Mr. Bob Cryer: On a point of order, Mr. Speaker, about prorogation. I put down a number of written questions which have not been answered, except by way of the usual rubric from Ministers that "I will provide an answer at some time in the future." On prorogation, everything before the House, except statutory intruments, falls. May I have your assurance that you will deprecate the action of any Minister who seeks to avoid answering questions by failing to produce a written answer before the time of prorogation? I put down questions several days in advance of the written priority limit and, like other Members, I have been given holding answers and told that substantive answers will be given at some future stage. As we are close to prorogation, it is important that Standing Orders under which Ministers are required to answer are followed.
Mr. Speaker: The whole House knows that at prorogation everything falls. The hon. Member would have to table his questions again and then receive an answer to them.
Mr. Tim Devlin: On a point of order, Mr. Speaker. Would it be in order for me to breach the guidelines set out by the Serjeant at Arms for the use of the emblem and the stationery? As you know, I am anxious that Michael Bates, our excellent by-election candidate in Langbaurgh, should win the election. I would like to write to every one of my Conservative colleagues to ask them to come up to Langbaurgh to help, and also send them a letter which did not bear the imprint of the election agent, ensuring, of course, that the matter did not appear on the election expenses of our candidate,. That is exactly what the hon. Member for —
Mr. Speaker: Order. What is the point of order for me?
Mr. Devlin: The point of order for you is that, if the hon. Member for Tyne Bridge (Mr. Clelland), of whom I have given notice of this point of order, has already done that, would I be allowed to do the same and not be charged?
Mr. Speaker: The hon. Member certainly would not. I was not aware of what he alleges against the other hon.
804
Member. He should let the Serjeant at Arms see that letter and allow him to deal with the matter, because the rules are plain.
Mr. David Winnick: On a point of order, Mr. Speaker. Have you received any indication from the Home Secretary that he intends to make a statement before the Session ends about the increase in the television licence fee? Are you aware that, if only a written answer is given, it will not be possible for us to make the point that, although the increase is undoubtedly good value for money—I have no quarrel about that—pensioners will have to pay the full increase out of the derisory increase that they will receive next year? Those of us who believe in a concessionary television licence fee for pensioners want to make that point. It will be unfortunate if the Home Secretary does not make an oral statement.
Mr. Speaker: I do not think that the Home Secretary will have a chance to make an oral statement about the matter in this Session. We shall have to see what happens in the next Session.
Mr. Dick Douglas: On a point of order, Mr. Speaker.
Mr. Steen: On a point of order, Mr. Speaker.
Mr. Speaker: I say to the hon. Member for South Hams (Mr. Steen), with great kindness, that I cannot hear him on this matter. I cannot allow him to ask the Minister a question, but I will look kindly on an Adjournment debate in the next Session.
Mr. Steen rose—
Mr. Speaker: Could I be fairer than that?
Mr. Steen: You could not be fairer than that, Mr. Speaker, but I have an urgent matter which you have not given me the opportunity to raise. I would like an opportunity now to explain the position. If you will allow me that opportunity —
Mr. Speaker: Order. I have explained the position in terms of order, not in terms of the question that the hon. Member would like to ask.
Mr. Steen: I am most grateful for that opportunity. I have the second largest fishing community in the south-west. I also have large naval establishments in my constituency. In August, we lost a fishing vessel out to sea with the loss of all the crew. Yesterday, as a result of a parliamentary question, it was discovered that severe damage occurred to the hull of the vessel. This is the only opportunity that I have to raise in the House the possibility that the fishing vessel, the entire crew of which was lost, was hit by a naval vessel. This the first and only opportunity for me to ask that question.
How can I obtain from the Minister a survey of the area on 11 August to find out which naval vessel was in the area, whether it be a British, European or Soviet ship? Otherwise, the loss of the ship and its crew may never be explained. I need the opportunity to raise that point.
Mr. Speaker: The hon. Member could not have obtained that answer today. As the incident occurred on 11 August, the hon. Member should have given notice of a private notice question or raised the matter in some other

805
way last week when we first returned. That would have been his first opportunity to do so. I cannot allow him to do it now.
Mr. Steen: On a point of order, Mr. Speaker.
Mr. Speaker: No, I have had enough of that.
Mr. Douglas: On a point of order, Mr. Speaker. You will have observed that I did not rise during the Minister's statement, because I left it to hon. Members with a more direct interest in fishing matters. Is it in order for the Minister, perhaps inadvertently—I put it gently—to mislead the House by giving the impression that he has a detailed knowledge of the report by the sheriff and saying clearly to the House —
Mr. Speaker: Order. This is an extension of the private notice question.
Mr. Douglas: No.
Mr. Speaker: It is not a matter of order for me. The Minister must take responsibility for what he said.
Mr. Andrew MacKay: Further to the point of order raised by my hon. Friend the Member for Stockton, South (Mr. Devlin), Mr. Speaker. You suggested that the hon. Member for Tyne Bridge (Mr. Clelland) might be in breach of House of Commons regulations. I assume that that refers to the advisory pamphlet with which we have all been issued by the Serjeant at Arms, about the use of the emblem on House of Commons stationery. It states:
"Original House stationery, which is provided at public expense, should not be used for the following purposes".
Point (d) mentions
"supporting the return of any person to public office".
I have in my possession a letter from the hon. Member for Tyne Bridge, which was referred to by my hon. Friend the Member for Stockton, South. The letter was clearly sent to all Labour Members, asking them to go to Langbaurgh for the by-election, and offering transport as well—presumably at public expense.
Mr. Speaker: Order. That is a repetition of what the hon. Member for Stockton, South (Mr. Devlin) has just said. I think that the matter should be drawn to the attention of the Serjeant at Arms.
Mr. Douglas rose—
Mr. Speaker: Order. It is unfair on the whole House for the hon. Member for Dunfermline, West (Mr. Douglas) to try to raise a question now that he would have liked to raise if I had called him on the private notice question. He was not rising then —
Mr. Douglas: That is not the case.
Mr. Speaker: Well, what is the case, then?
Mr. Douglas: You are putting words into my mouth, Mr. Speaker. I am quite capable of misquoting myself.
Further to my point of order, Sir, I asked you whether you would allow the Minister to examine what he had said about the sheriffs report. The sheriff clearly suggested that submarines could exercise in other areas, far away from fishermen. That is not the impression that the Minister gave the House or the nation.
Mr. Speaker: That is not a matter for me. If we wish to prorogue, we really should get on. We have a rather busy day ahead of us.
Several Hon. Members rose
Mr. Speaker: I will take a point of order from the hon. Member for Spelthorne (Mr. Wilshire).
Mr. David Wilshire: Further to the point of order raised by my hon. Friend the Member for Stockton, South (Mr. Devlin) —
Mr. Speaker: Order. The hon. Gentleman must draw the matter to the attention of the Serjeant at Arms; and, if necessary, it will then come to me, and I shall deal with it.
Mr. Wilshire: With respect, Mr. Speaker, how can you say that before you have heard whether I have a further point to raise?
Mr. Speaker: Because the hon. Gentleman specifically said, "Further to the point of order"—a point of order with which I have already dealt.
Mr. Wilshire: Indeed, Mr. Speaker; but it seems to me that, by the time that the matter has been drawn to the attention of the Serjeant at Arms, the by-election will already have taken place. Would it not be appropriate for you to draw it to the attention of the returning officer? That is where it matters now.
Mr. Speaker: I believe that the by-election will not take place for another two weeks. If the hon. Gentleman has any sense, he will see the Serjeant at Arms today.
Mr. Steen: On a point of order, Mr. Speaker. A moment ago, you suggested that I should have tabled a private notice question. I strongly deny that. The information that I received was given last night, in a parliamentary answer, by the Minister of State, who said that considerable damage to the ship had been found on the ocean bed. This is the first opportunity that I have had to raise the matter, and that is why I wanted to raise it today.
Mr. Speaker: I thought that the hon. Gentleman said that the incident had taken place on 10 August; he can check the record. He should have tabled a private notice question today. I am not a mind reader, but, if the hon. Gentleman had done that, I should have been able to consider the matter.

Companies (Miscellaneous Provisions)
4.3 pm
Mr. Ian Taylor: I beg to move,
That leave be given to bring in a Bill to give a company's directors standing authority to allot equity share capital to lending bankers to discharge indebtedness; to protect a lender in such circumstances from the shadow director provisions of company law and insolvency law; and for connected purposes.
There has been considerable controversy in recent months about the alleged behaviour of the banks in respect of the method of interest charging, and account charging, for individual and corporate borrowers. Indeed, I raised the matter myself in the House in a debate on the Finance Bill on 30 April 1991. Subsequently, the Government carried out an inquiry, and no direct allegations against the banks were upheld; nevertheless, there was considerable disquiet among many private and corporate borrowers.
It is true that many companies have been highly geared. It is justifiable to make criticisms of directors who have allowed their companies to borrow more than they should have done, in commercial terms. However, bankers were often not prudent in what they encouraged companies to borrow, often on terms that left the companies exposed when the recession came upon them.
Many directors of companies into which receivers have gone, at the instigation of the bank as secured creditor, have complained to me that by acting precipitately the bank lost any opportunity to enable the company to recover and therefore to provide the bank with the opportunity to recover the full value of its loans. In many cases, banks, having put in receivers, recovered less than they had originally expected to do through this secured charge.
Under this government, record numbers of new companies have been created in a climate attractive to entrepreneurs over the last 12 years as a whole. Net creation, as opposed to collapse, of companies is still positive. There are still more companies being created than there are going under. Yet, bearing in mind this background, total business failures, including receiverships, were up 71 per cent. to 33,532 in the first nine months of 1991, the largest increase in 11 years. The percentage of collapses to active companies as a ratio could rise to 2 per cent.
It is widely accepted that receiverships increase in number when a recession is ending, as banks begin to see hope that they can recover their loans against improving asset prices, rather than assuming that, if the company itself recovers its position, will also improve—which is the stance I should prefer them to take. Dun and Bradstreet has been quoted as saying:
"business failures continued to rise sharply for two years after the first signs of a recovery in 1981."
In those circumstances, the Opposition cannot say this time that this recession is continuing if the number of receiverships now paradoxically goes up.
To quote the late Sir Kenneth Cork on banks acting too quickly, he said not long ago that the banks should
"try to support their customers, to many of whom they lent too much money anyhow, through difficult times in the hope of saving the business. I get the impression they are not doing that and are pulling up the carpet much too quickly."
Banks seem still to prefer putting in a receiver to the more constructive procedure provided by the Insolvency Act
808
1986, which is to put in administrators. I am sad that the banks have not taken up the administration route, which is a much more constructive route, enabling there to be a package of measures that could rescue the core of the business.
The figures on administration are not very encouraging. Between January and March of this year, the last figures available to me, there were 64 administrative appointees in Great Britain. If we take the 12 months to March 1991, there were only 237 for the whole country. I am delighted that the Minister for Corporate Affairs is on the Treasury Bench. I know that he takes a particular interest in encouraging this modest version of what the Americans have in chapter 11, which enables the reconstruction of a company to take place in a protected atmosphere against creditors.
The Bill's proposals, which I believe are important, are several. They would provide directors with standing authority to allot equity for debt. Far-sighted boards have already obtained the permission of their shareholders to do that, but often it is not those companies that are in difficulties and under pressure, if times have become difficult. Any reconstruction will need subsequent shareholder approval because of the second company law directive, which has been on the statute book for a very long time. Yet at least in those circumstances shareholders can be offered some hope, whereas if they are merely told that the receiver has gone in, it implies that there will be little left for them, as ordinary shareholders. That is an important point. If banks consider, when they are completing their investigation of a company, that substituting that company's debt for equity is appropriate, there is a chance of rescuing the company and, in the long run, of benefiting the overall position of the bank.
By making the process more transparent, pressure could be brought on banks to consider equity swaps more favourably. That could be a particular factor during a period of administration. Banks should be encouraged to use the procedure for putting in an administrator rather than a receiver. That would enable a much more organised discussion to take place on the reorganisation of the company's balance sheet and prospects.
It is important that banks are seen to play a constructive part in any reorganisation, because many potential new equity investors would be reluctant to put new equity money into a company if it were used merely to bail out the banks' existing lending. Therefore, it is not credible to believe that new equity investors would invest in a company that would then repay its existing borrowing.
Equity injection, as an alternative, has other merits. Insolvency procedures are expensive and often badly reduce the value of the charge that the company has on fixed assets. As we all appreciate, insolvency proceedings are also expensive in human costs. If a receiver goes into a company, that has a dramatic impact on the employees and the owners.
My Bill would tighten the shadow director provisions, so that banks would have a clearer understanding of the risks that they take during a reorganisation. That is important, because in many cases banks have said to me that they perceive that the risks of becoming involved in a debt equity swap are too great because of the risk of being deemed to be shadow directors. It is theoretically possible in law for a bank to be regarded as a shadow director. If

809
it is involved in the potential of taking equity in a company, it is much more concerned that that might actually happen.
Under section 251 of the Insolvency Act 1986, a shadow director is defined as
"a person in accordance with whose directions or instructions the directors of the company are accustomed to act".
In normal circumstances, a bank providing advice to a company would merely be regarded as providing advice on a professional basis. In the event of a reconstruction, where the bank is intimately involved in the running of the company as well as the reorganisation of its affairs, it is possible for it to be thought that the bank is actually running the company. If that were to be the case, the bank would feel extremely exposed unless the laws on shadow directorships were clarified in respect of bankers. That is what I want. I want greater clarity in the laws as they would apply if a bank were actively to consider taking what would inevitably be a substantial equity stake in a company as an alternative to putting that company into receivership.
It must be realised that the shadow director provisions under the Companies Acts and the Insolvency Acts are severe. Although I do not in any way wish to give banks permission to indulge in wrongful trading—to use a definition in the 1986 Act—I want further clarification to limit the liabilities that would be faced by banks in the event that a reconstruction properly entered into nevertheless ultimately failed.
Although an equity for debt swap would affect a bank's capital ratios, the Bank of England must already be taking a close interest in the provisions that banks now have on the loans outstanding to companies. The National Westminster bank made recent provisions of £902 million for bad debts to United Kingdom private and corporate
810
customers. Therefore, receiverships can be a double blow for banks—not only do they lose value in terms of their loans to companies, but they lose value if the owner-shareholders are put into personal financial difficulty.
Although the banks should not emulate the German banks, serious considerations are involved. The object of the Bill is to put pressure on the banks to consider debt equity swaps, to encourage directors to negotiate these with banks, to promote the use of administration, and to give reasonable comfort to bankers that they will not automatically run foul of the tough shadow director provisions.
We have a climate that is favourable to companies and we want to avoid the direction and regulation that another Labour Government would introduce. We all have an interest in ensuring that banks fulfil their responsibilities to companies.
Question put and agreed to.
Bill ordered to be brought in by Mr. Ian Taylor, Mr. Tim Smith, Mr. John Watts, Mr. Colin Shepherd, Mr. Charles Wardle, Mr. James Paice, Mr. Keith Mans, Mr. Simon Burns, Mr. Barry Fields, Mr. Robert G. Hughes, Mr. John Bowis and Mr. Terry Dicks.

COMPANIES (MISCELLANEOUS PROVISIONS)
Mr. Ian Taylor accordingly presented a Bill to give a company's directors standing authority to allot equity share capital to lending bankers to discharge indebtedness; to protect a lender in such circumstances from the shadow director provisions of company law and insolvency law; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 25 October and to be printed. [Bill 220.]
Orders of the Day
  Export and Investment Guarantees Bill
  Lords amendments considered.
  Export and Investment Guarantees Bill
    Clause 11

      REINSURANCE OF ECGD RISKS
      Lords amendment: No. 1, in page 7, line 14, at end insert—
      ("(1A) The Secretary of State shall from time to time determine, in relation to such classes of risk determined by him as might be insured by him under section 1 of this Act, whether it is expedient in the national interest for him to exercise his powers under that section to make arrangements for reinsuring persons providing insurance for risks of that class.")
      Read a Second time.
      4.15 pm
      Ms. Joyce Quin: I beg to move amendment (c) to the Lords amendment, in line 7, at end add—
      'In the exercise of this power the Secretary of State shall be guided by the duty imposed on him under the old law of encouraging British exports'.
      Amendment (c) is important because at issue is the extent to which the Government will be obliged to take into account the need to promote and encourage British exports when considering whether to provide reinsurance facilities. The 1978 law used the expression "encouraging British exports". The Opposition believe that that commitment should be at the forefront of the Secretary of State's mind when he decides to what extent reinsurance should be provided.
      Amendment (c) would strengthen the hand of a future Secretary of State, especially if other Departments, such as the Treasury, which has a reputation for cost-cutting in export promotion, take a negative view of the reinsurance facility. The amendment would allow the Secretary of State to tell the rest of the Government and the Treasury that he is obliged to encourage British exports. It repeats an obligation under the old law, which operated satisfactorily until the Government decided to repeal it with this ill-thought-out Bill.
      The encouragement of exports is vital. Unfortunately, under the Bill, the service to British exporters—a service that is inferior to that enjoyed by our competitors—is likely to suffer. The Government's purpose is simply to cut costs and to reduce the extent of services that are available to exporters.
      I imagine that the Minister will say that we should be well aware from previous debates, especially the debate on clause I, that the word "encouraging" was felt to be more restrictive than facilitative. However, I do not believe that that argument applies to this amendment.
      This part of the Bill deals with the reinsurance facility. We say that, whenever the Government decide to provide top-up or national interest reinsurance, they should be motivated by the consideration of encouraging exports. We therefore believe that the Minister's objection to the word "exports" does not hold good.
      Amendment (c) would retain the spirit of the old law, which exporters believe served them well, and by accepting it the Government would send exporters a welcome signal
      812
      at a particularly difficult time for them. We have been made aware today of the extent of the Confederation of British Industry's criticisms of the Government's industrial and manufacturing policy, and it is true that manufacturing industry relies particularly on the services of the Export Credits Guarantee Department. If the Government accept our modest amendment, it would at least give some reassurance to industry that some of their difficulties are being taken into account.
      This month's trade statistics, which were issued today, show that there is an alarming manufacturing deficit. The manufacturing companies that use the ECGD's services see the ECGD as an important weapon to reduce that trade deficit, but they are worried that, under present proposals, it will not be available to the same extent as it was in the past.
      Amendment (c) would give exporters the impression that we will be active in some of the new markets in which we need to be involved, especially those of eastern Europe and the Soviet Union. Exporters have repeatedly given me the impression that British industry is falling behind because it is not getting the Government support that is available to many of our competitors. They have been worried about the lack of ECGD cover for the Soviet Union and the countries of eastern Europe. If amendment (c) is accepted, exporters will be encouraged by the thought that some of the difficulties under which they have been labouring in trying to export to those new markets will perhaps be overcome.
      Amendment (c) would send out the right message to those many exporters who fear that, if the Bill is passed in its present form, we will be at a disadvantage compared with our major competitors, especially in the European Community. Widespread concern was expressed in the other place about the lack of a level playing field in terms of export support and promotion.
      When the Government introduced the Bill in the other place, only the Minister spoke in favour—all other speakers on the Government and Opposition sides expressed either reservations or outright hostility. They included various captains of industry, two former Cabinet Ministers and two former Trade Ministers who had had specific responsibility for export credit, including the previous Minister for Trade, Lord Trefgarne, the predecessor of the hon. Member for Hove (Mr. Sainsbury). That shows the extent of the concern.
      Last week, Lord Trefgarne said in the other place that he was worried that our exporters using the services of the preferred purchaser, the Dutch company NCM, would be at a disadvantage compared with Dutch exporters using the same service. Lord Trefgarne was perturbed at the fact that, throughout the discussions last week and this week in the other place, he did not obtain a satisfactory answer from the Government spokesman. That shows how worried people are about whether this part of the Bill will provide for comparable services for exporters throughout the European Community. The Opposition will continue to monitor events closely in the coming months, because we want to ensure that our exporters who use the services of the new purchaser of the ECGD will have available to them the same services as are available to Dutch competitors and exporters in other parts of the European Community.
      If amendment (c) is accepted, exporters will be reassured about the way in which the Government will operate this reinsurance facility. That facility has two

      813
      parts, one of which is the top-up facility. The Government hope—they have not yet provided any proof—that within three years that facility can be taken over entirely by the private sector.
      Although there is no time scale in the Bill, I understand that the Government are sticking to their foolish belief that somehow, by magic, the private sector can absorb the reinsurance facility within three years. There is much concern that the Government are proposing to apply arbitrary limits to the amount of reinsurance under the top-up scheme over the next three years, and that is also something to which I should like the Minister to respond.
      Exporters are worried that the Government's policy will effectively cap the amount of top-up support provided in the next three years, and that the amount of support will progressively be reduced. The Government still insist that, at the end of three years, they expect that facility to be taken over by the private sector, no matter what the economic circumstances, the trade deficit and the position of our major exporters may be at that time. I should like the Minister to comment on that.
      We are also worried about the Government's intention about the national interest reinsurance facility to which the clause refers. We want to know how the Government propose to define that facility—how widely or how narrowly.
      Many exporters are rightly worried that there are many markets for which they will be unable to obtain such support in future. That fear was expressed well in another place and has also been expressed to me only this week by many exporters and exporting associations. The Minister has a duty to them and to us to say how he proposes to operate the national interest reinsurance facility in the future. Will it be operated in a way that encourages British exporters or will cost be the only consideration?
      The Bill contains no timetable for either the top-up scheme or for the national interest reinsurance provision. Therefore, there is no guarantee that they may not cease after the three years, which, I understand, is still the Government's policy on the top-up facility.
      I hope that I have outlined some of our main concerns and those of the exporting community. Our point of view has been widely supported in industry, and if the Minister cannot give us the necessary reassurance and is unwilling to accept the amendments, industry's concerns about the legislation will continue in the weeks and months ahead. The amendment would partially rectify our worries about the measure, and would go some way to allaying exporters' fears. We hope that the Government are willing to accept it.
      The Minister for Trade (Mr. Tim Sainsbury): I fear that the hon. Member for Gateshead, East (Ms. Quin) will he disappointed, because I cannot recommend the amendment to the House. Indeed, I shall go further and say that it would be unhelpful, not only in terms of this excellent Bill but to Britain's exporters.
      One reason for opposing the amendment is factual. There is no duty in the Bill—nor was there in the Act that the Bill replaces—for the Secretary of State to encourage trade. There is no duty—I stress that word, which is the word used in the amendment.
      In the Bill and in the Act, the Secretary of State is given permissive powers to encourage trade and to facilitate supplies. There would be serious doubts about how to determine in legal terms whether a duty to encourage had
      814
      been discharged, and I foresee great problems in the courts if that issue were to be brought before them. So, the first but substantial reason for rejecting the amendment is that, under both pieces of legislation, the Secretary of State is given only permissive powers.
      The hon. Lady reminded us that we debated the issue at some length not only in Committee, but on Report. The matter also came up in another place. On each occasion, we pointed out that the word "encourage" was open to some challenge and threw doubt on what the total powers were. It seems logical to say that one cannot encourage something that has already happened. One can make it easier for it to take place. One can facilitate an export by providing all sorts of things, such as transport and insurance, but one can scarcely encourage it if it has already taken place.
      The old words of "encouraging exports" were less helpful to British exporters than the new formula that we have used, which refers to "facilitating the supply". The new formula allows the ECGD to give assistance where it is currently statutorily debarred from doing so.
      4.30 pm
      The same objection, which we went through in Committee and in another place, holds in the context of reinsurance. Reinsurance is not there as an end in itself; it is there to facilitate exports. One may try to encourage exports, but how does one encourage something that has already happened? It is clear that the word "facilitating", which we have used, is a far better word. Unlike the hon. Lady, we do not want to restrict the help that the ECGD can give British exporters. It would be extremely difficult to determine whether it was practical to have a duty to "encourage".
      I want to confirm that the competitive position of British exporters is one of many aspects that the Government will take into account when determining the national interest case for providing reinsurance. Trade and diplomatic aspects need to be considered as well. ECGD's primary objective will remain helping British exporters by giving export credit and investment insurance. I hope that that is apparent from everything that we have said about this excellent Bill throughout the proceedings.
      Mr. Peter Thurnham: Is my hon. Friend aware of a major exporter in my constituency, Beloit Walmsley, which has a large inquiry from Iran and is interested in having ECGD cover for Iran? Can he say anything that would be helpful at this stage? The inquiry is at an advanced point commercially. The firm has been told by the Iranians that it is the best bidder, subject to clearing up the question of ECGD cover.
      Mr. Sainsbury: I am well aware of the case to which my hon. Friend refers and of the energetic steps that he has taken to help his constituency company to obtain what would be a valuable order. I am sure that he is also aware of the particular difficulties associated with that market. I remind him that ECGD cover for short-term credit is available for exports to Iran. Medium-term cover is under review. The review is taking account of significant export opportunities such as the one to which my hon. Friend referred. The review also needs to take account of political developments, some of which have been helpful recently.
      I cannot tell my hon. Friend when the review will be completed or what the outcome will be, but I can tell him that I am reasonably optimistic that we shall reach a

      815
      conclusion in the very near future. I will bear in mind what my hon. Friend has said about the export opportunity for the company in his constituency.
      I am sure that the House will recall that lengthy debates took place in Committee and on Report about the provision of reinsurance support by the Government for the new company after privatisation. On Report, the House decided not to agree to certain amendments, partly on the ground that they gave rise to significant legal and technical difficulties.
      The debate continued in another place, and the issues arose again. In response to the further debate and to the suggestions put forward, parliamentary draftsmen were able to draw up new amendments which meet the concerns expressed in both Houses while avoiding the legal and technical difficulties inherent in the previous amendments that we rejected and which were tabled in another place.
      Lords amendment No. 1 imposes a permanent—I stress "permanent"—obligation on the Secretary of State to determine from time to time whether a national interest case exists for him to use his general enabling powers under clause 1 to provide reinsurance to insurers who provide direct insurance for the same classes of risk as those in respect of which the Secretary of State himself might otherwise directly provide under the provisions of clause 1.
      The new obligation that the amendment would introduce into the Bill is widely drawn and therefore relates to all types of reinsurance, including reinsurance of the kind to be provided under the so-called transitional top-up national interest facilities to which the hon. Member for Gateshead referred and which the Government are committed to providing to the privatised insurance services group. The amendment imposes no restriction on who may be the recipient of the reinsurance.
      The amendment reflects the desire expressed in both Houses for the ministerial assurances given at various stages to be reflected in the Bill, while at the same time avoiding the pitfall that had arisen in the context of other similar amendments considered in both Houses.
      Ms. Quin: Will the Minister confirm that he intends to phase out the top-up facility after three years, and will he respond to my question whether there will be a reducing element in the amount of support in the top-up facility over the three-year period?
      Mr. Sainsbury: I had intended to come to that point later, but perhaps I may do so now.
      The hon. Lady refers to the top-up facility, which, as she knows, has been debated at some considerable length. Since the announcement in 1989 of the decision to privatise the insurance services part of ECGD, there has been continual work on the issue of reinsurance, because we recognise that it is an important part of the total package. The Government have recognised throughout that, at the outset, there might be a small shortfall—I emphasise "small"—between the company's full requirements for reinsurance and what the market could provide.
      That was foreshadowed in the statement made on 18 December 1989 by my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), then Secretary of State for Trade and Industry. My right hon. Friend announced the Government's decision on privatization
      816
      and referred to the need for a continuing reinsurance link between the ECGD and the privatised insurance services. We said that that top-up reinsurance facility would exist for three years, and it would be looked at in the light of requirements and in the light of the take-up in the market.
      We have discussed the issue on a number of occasions, and I have been able to assure the House and the hon. Member for Gateshead that the market's response to the request for reinsurance has been positive. That is a tribute not only to the capacity of the market but to the ability of the ECGD and its advisers to obtain reinsurance.
      The second type of reinsurance —
      Ms. Quin: Before the Minister deals with the second type of reinsurance, will he say clearly what I think he was saying—that the top-up facility can continue beyond three years?
      Mr. Sainsbury: I was saying that the top-up facility was due to continue for up to three years, in the light of the requirements—in the light of the gap between what the market provides and what the company needs. As I have just said, the market has shown a great willingness to take the reinsurance requirement, and that is why we are confident that, within that period, there will no longer be a need.
      The second type of reinsurance relates to the high-risk —
      Mr. Michael Morris: I understand the market to be helpful at the moment, but none of us can forecast what the market will be in a year or 18 months. Will my hon. Friend therefore clarify two points—first, that the sum is not a capped sum, and, secondly, whether the requirement is that it "shall" be phased out within three years or that it "may" be phased out within three years?
      Mr. Sainsbury: I have given a commitment several times that the requirement would be met for up to three years. At the moment, the expectation is that it will not even be needed for all that time, because of the market's response. While I appreciate what my hon. Friend the Member for Northampton, South (Mr. Morris) says about not being entirely certain about markets, there is a fair predictability about the behaviour of markets and reinsurance markets to a portfolio risk which does not differ greatly in its overall make-up or size. The reaction of many experts confirms that, as the market becomes more familiar with the quality of portfolio risks presented to it, the spread of risks and the quality of management of the insurance services group, so it will be more ready to absorb the cover that is required.
      Even before the company exists—and given that element of uncertainty—it is remarkable that the market has shown itself willing to undertake to provide so much reinsurance that there is only a very small gap between what the market is prepared to take and the total requirement.
      There is no time limit on the other form of reinsurance, which is now called the national interest reinsurance facility. There may be some confusion here. When I refer to the ECGD in this context, I mean the continuing ECGD —that part of the ECGD that exists at the moment and which will continue in existence as part of the

      817
      Government. The ECGD will provide 100 per cent. reinsurance to the new company on the small handful of higher risk countries. That facility will not be time-limited.
      In order to meet concerns expressed by hon. Members that the facility might be withdrawn prematurely, I assured the House that the requirement for the facility would be kept under close review, and that it was the Government's intention that, subject to it performing satisfactorily as an ECGD trading facility, it would continue for as long as the Government considered it essential to meet the reasonable needs of exporters. Lords amendment No. I deals with that point.
      Lords amendment No. 1 also imposes a permanent obligation on the Secretary of State to determine from time to time whether a national interest case exists for him to use his general enabling powers under clause 1 to provide reinsurance to insurers. As that is permanent, the reinsurance arrangements that we have announced will ensure that, in the aftermath of privatisation, there is no sudden or sharp reduction in the level of facilities available to our exporters.
      Lords amendment No. 1 will ensure that the need for that kind of reinsurance will be kept under permanent review. The amendment makes even better what was already an excellent Bill. It will ensure that our exporters, as the first beneficiaries of the privatisation, will receive a service from the new company and from the continuing ECGD which will be better matched to their immediate and future needs and better placed to meet the challenges and opportunities of exporting in the single European market and throughout the 1990s. I commend the Lords amendment to the House and urge it to reject the imperfectly drafted, but I believe well intentioned, amendment to it, tabled by the hon. Member for Gateshead, East.
      4.45 pm
      Mr. George Howarth: I support the amendment to the Lords amendment and I want to participate in the debate because a company called Cross Europe in my constituency has a problem. Cross Europe is part of an American-based multinational company called Cross and Trecker. Having seen what has happened at Cross Europe and having listened to the Minister today, I believe that the Government stand accused of stunning complacency. When exporters around the country face terrific difficulties with the schemes, to claim that everything in the garden is rosy and is getting better does not reflect the experience of Cross Europe. I have seen press reports which confirm that that company's experiences are not unique.
      I will give the facts about. Cross Europe because I am sure that that will prove the case for the amendment to the Lords amendment tabled by my hon. Friend the Member for Gateshead, East (Ms. Quin). Cross Europe won an order in the summer of 1990 to supply equipment for differential case and axle tubes—in effect, machine tools —for the new Moskawitch engine programme to be supplied by a company called Ishevsk. Cross Europe won that contract in the face of extremely effective competition from Germany and Italy and it obtained a very successful £5 million order.
      There was subsequently some discussion about the method of payment for the scheme. Between August and
      818
      December, the contract was negotiated and submitted to Midland Montagu and ECGD for inclusion under line of credit and approval respectively.
      Therefore, the method of payment had been agreed in December. The company planned the order into its work programme, and the negotiated contract was signed on 19 December 1990. In January 1991, after the company had geared up for the order, it was told that there was to be a review of the ECGD coverage with the USSR in general and that special contracts, Cross Europe's included, were to be pulled out for special treatment.
      Between January and February, there were frequent contacts between Midland Montagu and ECGD, and Cross Europe and ECGD. The company was told that the issue would be resolved by March 1991, but it was not. In May 1991, Cross Europe contacted me. The company was anxious not to create any publicity. It simply wanted to unsnarl the red tape and get on with the order which, by that time, it was manufacturing.
      I wrote to the Secretary of State for Trade and Industry on 31 May 1991. I will not quote the whole of that letter, but two paragraphs are important. In one, I wrote:
      "As I understand it, Ricardo, based in Brighton and Lamb, based in Mildenhall, have subsequently taken steps to fulfil their contracts through sister companies in Canada and Germany, since they were able to get the necessary export guarantee schemes there. However, Cross Europe have actually already started work on the project within the UK and, therefore, are seriously exposed if they are not allowed the necessary export guarantee cover in the very near future."
      In the other paragraph, I wrote:
      "Since all of the original five companies"—
      the companies that were caught up in the review—
      "have taken their business elsewhere and I have no knowledge of the other two, it is quite possible that Cross Europe are the only company remaining with this difficulty. In any event, even if the other two are still in the same situation, allowing for both of them having contracts to the value of say £10 million each, the amount of risk to which ECGD will be exposed would in terms of its total operations be very small indeed."
      On 28 June, the Minister for Trade was kind enough to reply to my letter. The final paragraph of his letter reveals all about the Government's attitude to these problems. He wrote:
      "I regret" —
      we have all heard those words before —
      "that I cannot say how long the review will take or pre-judge its outcome. I can assure you, however, that we will complete it as soon as we reasonably can. I shall ensure that you are informed of the decision. In the meantime, I would suggest that the company contact David Wyatt (Head of ECGD's East European Projects Branch"—
      it gives the telephone number —
      "in order to keep abreast of developments."
      I have heard no more. Cross Europe is certainly in weekly contact and sometimes more than weekly contact with ECGD, as was suggested by the Minister, but the Minister appears to have washed his hands of the matter —so much so that, in September of this year, Mr. Normal J. Ryker, the vice-chairman and chief executive officer of Cross and Trecker Corporation, wrote to the Prime Minister. As far as I know, there has been no response to the letter.
      If I may read just one paragraph of Mr. Ryker's letter to the Prime Minister, it will even further illuminate the House in respect of the inactivity of that Government Department in its dealings with exports. Mr. Ryker says:
      "The machine tool industry in general and our UK Subsidiary has suffered through a depression for an extended period of time and the financial position of the UK branch

      819
      would deteriorate substantially with far reaching consequences both for our British workers and in other areas of the company if the delay would continue beyond the aforementioned shipment date. The machinery in question is specially designed for the customer and cannot be utilised for other customers and only a small percentage of material would be available for salvage."
      Therefore, £5 million-worth of equipment, which was built by the company in good faith on the basis of an order and understandings with the Midland bank and unaware that a review was about to take place, is standing crated up on the shop floor of Cross Europe in my constituency, and the Minister sits on the Government Front Bench as though there is nothing wrong with the export credits guarantee scheme. He sits there with smug complacency, pretending that there is no problem.
      I followed up that letter by writing to the Prime Minister on 10 October. I still have not had a reply from the Prime Minister. I have long since given up any belief that any contact that I could possibly have with the Department of Trade and Industry, which seems to be almost detached from exports and encouraging industry, would produce anything. The company has made that decision and it is dealing directly with the Prime Minister, who himself does not seem able to reply to that letter. I have even taken to writing directly to the Prime Minister.
      That £5 million of equipment was made in good faith, is now ready to be exported, and awaits the necessary agreement from the ECGD and the intervention of the Government for which Mr. Ryker asks. I should imagine that Mr. Ryker is no great supporter of the Labour party, as he is a serious American industrialist. He and his managers in my constituency say that that inactivity does not happen in Germany, France, or the United States, but it is happening in this country. The bottom line is that nearly 200 jobs in my constituency are now at risk because of that inactivity. That company was opened in Knowsley in 1970, interestingly enough by Lord Wilson of Rievaulx, who was then the constituency Member. That company may end up closing down because the Government have left it financially exposed.
      When I became involved in May last year, the company had already been told that the review would be completed in March of that year. That date had passed. We still have not had a decision from the Government's review of the Export Credits Guarantee Department and its dealings with the Soviet Union. How much longer is that inactivity and complacency to continue? We are supposed to be an exporting nation. Why are we constantly losing manufacturing capacity? It is because of the incompetence and bungling of the Government in export orders and manufacturing. Let us support the amendment and let us start encouraging exports, which is what the amendment would do.
      Mr. Sainsbury: With the leave of the House. I am sure that the whole House sympathises with the position in which Cross Europe finds itself, but I hope that nobody sympathises with the synthetic indignation and allegations of the hon. Member for Knowsley, North (Mr. Howarth). I should have thought that even those who do not make a great habit of reading the newspapers or even of watching television would have noticed that there are problems connected with the Soviet Union for which any exporter and any export credit agency must have regard.
      Mr. Howarth: I conceded precisely that point in a letter to the Secretary of State, to which the Minister of State replied, and I also conceded it in a recent letter to the Prime Minister. Everybody worldwide recognises the serious problem. France, Germany and the United States are still successfully trading and guaranteeing trade with eastern Europe and the Soviet Union. Why cannot we do the same?
      Mr. Sainsbury: I can appreciate that perhaps the hon. Gentleman does not understand the nature of export credit insurance. Export credit insurance for short terms has been available for the USSR, and it is available not only for the USSR but for all the countries of central Europe. The hon. Member for Gateshead, East (Ms. Quin) spoke as though it was not so available. That is an important point. Medium-term cover is available for Hungary and Czechoslovakia.
      We are talking about the Export Credits Guarantee Department; it has nothing to do with privatisation, and nor has the case to which the hon. Member for Knowsley, North referred. The hon. Gentleman is seeking medium-term cover which would be provided by the continuing ECGD—still a Government Department. We are not concerned with privatisation.
      If the hon. Lady is suggesting that that Department should provide cover, regardless of the risk, regardless of its exposure in a particular market, and regardless of political developments—I do not know whether the hon. Member for Knowsley, North has noticed that there is a continuing difficulty in the Soviet Union—I am not surprised that the review of the wisdom of continuing cover is still continuing, because —
      Ms. Quin rose—
      Mr. George Howarth rose—
      Mr. Sainsbury: I shall not give way again to the hon. Member for Knowsley, North. The hon. Member for Gateshead, East wants to intervene. I shall let the hon. Lady have her chance first.
      There is continuing economic uncertainty in what I think I must refer to as the former Soviet Union, and particularly as regards the economic arrangements between the central authority, the former Soviet Union authority, and individual republics.
      Ms. Quin: Does the Minister agree that it is absurd that we did more trade with the old Soviet regime than we are doing with the new, reforming Soviet regime? Will he confirm that we have effectively been off medium-term cover for the Soviet Union for more than a year and that that differentiates us from most other developed countries?
      Mr. Sainsbury: The hon. Lady will find that nearly every country is now off medium-term cover for the Soviet Union in view of the disturbed state of the economy and the lack of clarity of the economic arrangements, for instance, between the Ukraine republic, the Russian republic and the central authority. That must be reflected in the ECGD's decisions on cover. I stress that short-term cover has been available and is still available to all the countries of central Europe.
      The hon. Member for Knowsley, North suggested that we were saying that everything in the garden was lovely, and then went on to suggest that, quite to the contrary, everything was a total disaster. Such allegations come

      821
      frequently not only from the Opposition Front Bench but from all parts of the Opposition—for example, that Britain's manufacturing is a total disaster and is doing very badly.
      That is more than surprising when we consider the facts. In August of this year, output was 17 per cent. higher than the average level for 1980, export volume was up by two thirds, and productivity was 60 per cent. higher. The most recent figures, which were announced this day, show that manufacturing exports, a matter about which the Opposition are expressing much concern, in the last quarter are 7·5 per cent. up on the same period last year.
      I congratulate British manufacturing exporters on that achievement, because they have succeeded in increasing exports by that significant amount against a background of difficult world trading conditions. Instead of knocking our exporters and our manufacturing, the Opposition should recognise and praise achievements. I am sorry about Cross Europe, but I hope that even the hon. Member for Knowsley, North will understand that it is because the situation in the Soviet Union is so uncertain that we have to keep our medium-term credit provisions under review.
      5 pm
      Mr. Rhodri Morgan: We are now considering the last Act of the overspill period of the fourth year of this Parliament, so I should like to take the opportunity of telling the Minister how frustrating he is to deal with. He is frustrating for us as an Opposition and exceedingly frustrating for those in British industry. He has done nothing more this afternoon than to repeat his performances in Committee when, every day, he wrote a PhD in hair-splitting and nit-picking. Even today, he has managed to send to sleep the hon. Member for Windsor and Maidenhead (Sir A. Glyn), who is notorious throughout the House for the attention that he gives to such matters.
      Mr. George Howarth: I am grateful to my hon. Friend for allowing me to intervene briefly, because the Minister would not do so. As I want to raise a point that he did not answer, perhaps my hon. Friend could press it for me. Cross Europe signed an agreement to provide the Soviet Union with equipment in December 1990. The ECGD review, with which Cross Europe is now caught up, did not start until January 1991. That is an important point, which has not been answered.
      Mr. Morgan: I cannot do better than say that I am sure that Cross Europe's frustrations when dealing with the Government's lack of support for industry and its exports to critical markets is repeated across the country. That experience is not restricted to that one outstanding machine tool company in my hon. Friend's constituency. There are hundreds of similar examples. Indeed, much of what the Prime Minister was talking about at the G7 meeting—about increasing exports to the Soviet Union, providing it with model farms, model food distribution systems and even food this winter—may be vitiated by the DTI's lack of action and decision making.
      The hon. Member for Hove (Mr. Sainsbury) is one of the Ministers who is responsible for not doing anything. The DTI has not been able to decide how much backing British industry needs in those critical markets. He was unable to answer his hon. Friend the Member for Bolton,
      822
      North-East (Mr. Thurnham) who asked him about the Beloit Walmsley's proposed paper mill contract with Iran. We have not had any decisions or replies except for: "We are carrying out a review. Hang on, we'll come to a decision in perhaps a month or two and we hope that the contract will still be available then."
      That is a classic example of what is wrong with the DTI's non-involvement in the process of providing support for British exports, and that is what has made this such a depressing Bill for the Opposition as well as for British industry. We have had to become the defenders of British industry's interests in this House, because Ministers—
      Mr. Sainsbury rose—
      Mr. Morgan: I see that I have stung even the Minister into action, and he stirs up apathy wherever he goes. I shall be glad to hear his intervention.
      Mr. Sainsbury: Although we are used to quite a lot of inaccuracy from the hon. Member for Cardiff, West (Mr. Morgan)—we became very familiar with it in Committee —his suggestion that the DTI is not helping exporters deserves some rebuttal. About 2,000 people worldwide in 150 overseas posts, plus those at our regional offices and headquarters, work exclusively to help our exporters. Many others, including the Prime Minister and the heads of our Missions, spend a lot of time helping them. I wish that the hon. Gentleman would recognise that and pay tribute to the success of our exporters.
      Mr. Morgan: Speaking as a former DTI civil servant, I can well appreciate that people who are trying to do a good job to support British exports actually do so, despite an extraordinary lack of ministerial involvement. Ministers need not listen to me on this point, and I do not ask them to accept my word for it—they will never accept that I am an objective guide. All they need do is read the headline on page 1 of today's Financial Times and consider what the Confederation of British Industry has said. Now that I have found my spectacles, I shall read the direct quote to the Minister. Speaking on behalf of the CBI working party on manufacturing industry, Sir Colin Chandler, the managing director of Vickers, said:
      "We need a powerful voice sitting around the cabinet table speaking up for industry."
      Is that supposed to be a vote of confidence in the current regime at the DTI from Britain's major exporters as represented on the CBI's three-person working party by the heads of Vickers, Vauxhall Motors and British Aerospace? Only rarely at the end of a Session have British industry's large-scale exporters and those at the cutting edge of technology expressed such a lack of confidence in the DTI. That does not happen at the end of every Parliament, but it has been happening regularly during the past six months. When presenting their annual reports, the chairmen of our large firms have begun to express a degree of disillusionment with this Government. That happened with British Aerospace and Pilkington, and it has now happened with the CBI working party that represents the other heavyweights.
      When the other place discussed the amendments, the Government were isolated. They did not have a single friend. That is why we have taken great pleasure in attempting to fortify the Lords amendments by tabling our amendments which seek to take the process a little further than the Government were willing to do when they were

      823
      finally forced to table amendments to try to reconcile the views of the two Houses, and that is why we are discussing these provisions now. We are trying to ascertain how we can carry the process forward. The Government tried simply to buy off the opposition in the other House. We know that the Government are trying to climb down, so we are seeking to give effect to what the other House would have liked to do. We want to express our firm commitment to and to encourage our British exporters.
      One senior captain of British industry, who would be most embarrassed if I were to name him, attended a recent private meeting with Labour Members at which he said, "What the present Government do not understand is the difference between support for British industry and intervention on behalf of British industry." British industry needs support, but it is not getting it. It does not want to return to old-fashioned interventionism, but it does want the same degree of support that is given to French and German industry by their Governments and to Japanese industry by its Ministry of International Trade and Industry. British industry has been left with a lot of half-baked Thatcherite claptrap at the Department of Trade and Industry, and we have seen more of it this afternoon.
      Although I am pleased to be speaking as the House considers the final Act of this Session, I speak also with some regret, because I have a strong constituency interest in the Bill. More than 700 people work for the ECGD in Cardiff. Most of them will find that their work is to be privatised, although some will remain civil servants and will work in a sort of halfway house, continuing to provide a service for the ECGD which itself will be privatised and given into the ownership of NCM, the Dutch exporting insurance combine, which appears to be the favoured tenderer for taking over most of the ECGD's Cardiff operations.
      We are not happy about that, but I am sure that the Secretary of State for Wales will claim it as a major success for his drive to bring foreign investment into Wales. The simple fact is that no British companies were interested in taking over the ECGD's insurance services group, and when some foreign bidders dropped out, the only realistic bid remaining was from NCM. It is a highly professional organisation, but I do not know whether it is the best organisation to handle the reinsurance of Britain's exports. We must bear in mind the fact that we are talking about the United Kingdom's national interest, not the Dutch national interest.
      The Government's hypocrisy goes even further. I should like to draw the House's attention to what the Secretary of State said in his much-praised speech to the Conservative party conference. I must admit to enjoying reading it. The Financial Times of 11 October reported:
      "Stating an intention to 'intervene for British industry abroad' Mr. Lilley nonetheless said he did not believe in intervening at home."
      Which category does export credits reinsurance fall into? Is that intervening for British industry abroad, in which the Secretary of State does believe, or is it intervening in British industry at home? The constituents of my hon. Friend the Member for Knowsley, North (Mr. Howarth) might have a word or two to say about that.
      824
      The Secretary of State's speech was much praised. I am told that it was praised because it contained self-deprecating jokes or, to paraphrase Churchill on Attlee, because he is a self-deprecating little man with much to be self-deprecating about.
      The CBI report shows how extraordinarily remote the Government have become from what used to be thought their natural constituency in industry. It is their natural constituency no more.
      That is why we shall press the amendment to a vote this afternoon. We must ensure that British exports are encouraged. The Minister has made an extraordinarily nit-picking attempt to counter that argument today, repeating more than half a dozen times what he said in Committee. The Minister's claims will have no effect at all in the face of the way in which British industry will view the Bill without our fortifying amendments.
      I hope that I can persuade the Government to add this amendment to the climb-downs from original Thatcherism that we have already seen with the poll tax and, more lately, with the Secretary of State for Health's opposition to tax relief on private health insurance for the over-60s. Let the Government make that three by accepting this amendment, so that the message can go out to British industry that the Government have at last started to see the light, that non-intervention does not always work and that they should be doing for British industry what the German, Japanese and French Governments do for their industry.
      Question put, That the amendment to the Lords amendment be made:—
      The House divided; Ayes 173, Noes 202.

      Division No. 233]

      [5.11 pm

      AYES

      Adams, Mrs Irene (Paisley, N.)

      Darling, Alistair

      Allen, Graham

      Davies, Rt Hon Denzil (Llanelli)

      Alton, David

      Davies, Ron (Caerphilly)

      Archer, Rt Hon Peter

      Dixon, Don

      Armstrong, Hilary

      Dobson, Frank

      Ashdown, Rt Hon Paddy

      Dunwoody, Hon Mrs Gwyneth

      Ashley, Rt Hon Jack

      Eadie, Alexander

      Ashton, Joe

      Eastham, Ken

      Banks, Tony (Newham NW)

      Evans, John (St Helens N)

      Barnes, Harry (Derbyshire NE)

      Ewing, Harry (Falkirk E)

      Battle, John

      Fearn, Ronald

      Bellotti, David

      Field, Frank (Birkenhead)

      Benn, Rt Hon Tony

      Fisher, Mark

      Bennett, A. F. (D'nt'n & R'dish)

      Flannery, Martin

      Benton, Joseph

      Flynn, Paul

      Blair, Tony

      Foot, Rt Hon Michael

      Bray, Dr Jeremy

      Foster, Derek

      Brown, Gordon (D'mline E)

      Fraser, John

      Brown, Ron (Edinburgh Leith)

      Fyfe, Maria

      Bruce, Malcolm (Gordon)

      Garrett, John (Norwich South)

      Caborn, Richard

      Garrett, Ted (Wallsend)

      Callaghan, Jim

      Golding, Mrs Llin

      Campbell, Ron (Blyth Valley)

      Gordon, Mildred

      Campbell-Savours, D. N.

      Gould, Bryan

      Canavan, Dennis

      Graham, Thomas

      Clark, Dr David (S Shields)

      Griffiths, Nigel (Edinburgh S)

      Clarke, Tom (Monklands W)

      Griffiths, Win (Bridgend)

      Clelland, David

      Hain, Peter

      Clwyd, Mrs Ann

      Hardy, Peter

      Cohen, Harry

      Hattersley, Rt Hon Roy

      Cook, Robin (Livingston)

      Haynes, Frank

      Corbett, Robin

      Henderson, Doug

      Cousins, Jim

      Hinchliffe, David

      Crowther, Stan

      Hogg, N. (C'nauld & Kilsyth)

      Cryer, Bob

      Home Robertson, John

      Cummings, John

      Howarth, George (Knowsley N)

      Cunliffe, Lawrence

      Howell, Rt Hon D. (S'heath)

      Cunningham, Dr John

      Hoyle, Doug

      825

      Hughes, John (Coventry NE)

      Pendry, Tom

      Hughes, Roy (Newport E)

      Pike, Peter L.

      Hughes, Simon (Southwark)

      Powell, Ray (Ogmore)

      Ingram, Adam

      Prescott, John

      Janner, Greville

      Primarolo, Dawn

      Jones, Barry (Alyn & Deeside)

      Quin, Ms Joyce

      Kaufman, Rt Hon Gerald

      Radice, Giles

      Kennedy, Charles

      Randall, Stuart

      Kilfoyle, Peter

      Redmond, Martin

      Kinnock, Rt Hon Neil

      Reid, Dr John

      Kirkwood, Archy

      Richardson, Jo

      Leadbitter, Ted

      Robertson, George

      Leighton, Ron

      Rogers, Allan

      Lewis, Terry

      Rooker, Jeff

      Litherland, Robert

      Ross, Ernie (Dundee W)

      Livingstone, Ken

      Rowlands, Ted

      Lloyd, Tony (Stretford)

      Ruddock, Joan

      Lofthouse, Geoffrey

      Salmond, Alex

      Loyden, Eddie

      Sheerman, Barry

      McAllion, John

      Sheldon, Rt Hon Robert

      McCartney, Ian

      Shore, Rt Hon Peter

      Macdonald, Calum A.

      Short, Clare

      McFall, John

      Skinner, Dennis

      McKay, Allen (Barnsley West)

      Smith, Andrew (Oxford E)

      McKelvey, William

      Smith, C. (Isl'ton & F'bury)

      McLeish, Henry

      Smith, J. P. (Vale of Glam)

      McMaster, Gordon

      Snape, Peter

      McNamara, Kevin

      Steinberg, Gerry

      McWilliam, John

      Stott, Roger

      Madden, Max

      Strang, Gavin

      Mahon, Mrs Alice

      Straw, Jack

      Marek, Dr John

      Taylor, Mrs Ann (Dewsbury)

      Marshall, David (Shettleston)

      Thompson, Jack (Wansbeck)

      Marshall, Jim (Leicester S)

      Vaz, Keith

      Martin, Michael J. (Springburn)

      Wallace, James

      Martlew, Eric

      Walley, Joan

      Meacher, Michael

      Wardell, Gareth (Gower)

      Meale, Alan

      Wareing, Robert N.

      Michie, Bill (Sheffield Heeley)

      Watson, Mike (Glasgow, C)

      Morgan, Rhodri

      Welsh, Michael (Doncaster N)

      Morley, Elliot

      Williams, Rt Hon Alan

      Morris, Rt Hon A. (W'shawe)

      Williams, Alan W. (Carm'then)

      Morris, Rt Hon J. (Aberavon)

      Winnick, David

      Mullin, Chris

      Worthington, Tony

      Murphy, Paul

      Wray, Jimmy

      Nellist, Dave

      Young, David (Bolton SE)

      O'Brien, William

      O'Hara, Edward

      Tellers for the Ayes:

      O'Neill, Martin

      Mr. Eric Illsley and

      Orme, Rt Hon Stanley

      Mr. Thomas McAvoy.

      Patchett, Terry

      NOES

      Adley, Robert

      Buck, Sir Antony

      Alison, Rt Hon Michael

      Burt, Alistair

      Allason, Rupert

      Butler, Chris

      Arbuthnot, James

      Carlisle, Kenneth (Lincoln)

      Arnold, Jacques (Gravesham)

      Carrington, Matthew

      Ashby, David

      Carttiss, Michael

      Aspinwall, Jack

      Cash, William

      Atkins, Robert

      Chalker, Rt Hon Mrs Lynda

      Atkinson, David

      Channon, Rt Hon Paul

      Baker, Nicholas (Dorset N)

      Clark, Rt Hon Sir William

      Barnes, Mrs Rosie (Greenwich)

      Clarke, Rt Hon K. (Rushcliffe)

      Beaumont-Dark, Anthony

      Coombs, Anthony (Wyre F'rest)

      Bellingham, Henry

      Coombs, Simon (Swindon)

      Bendall, Vivian

      Couchman, James

      Bennett, Nicholas (Pembroke)

      Currie, Mrs Edwina

      Bevan, David Gilroy

      Davies, Q. (Stamf'd & Spald'g)

      Bonsor, Sir Nicholas

      Davis, David (Boothferry)

      Boswell, Tim

      Day, Stephen

      Bottomley, Peter

      Dickens, Geoffrey

      Bottomley, Mrs Virginia

      Dicks, Terry

      Bowden, A. (Brighton K'pto'n)

      Dorrell, Stephen

      Bowden, Gerald (Dulwich)

      Dover, Den

      Bowis, John

      Durant, Sir Anthony

      Brazier, Julian

      Eggar, Tim

      Bright, Graham

      Evans, David (Welwyn Hatf'd)

      Brown, Michael (Brigg & Cl't's)

      Farr, Sir John

      Bruce, Ian (Dorset South)

      Fenner, Dame Peggy

      826

      Finsberg, Sir Geoffrey

      Morrison, Rt Hon Sir Peter

      Fishburn, John Dudley

      Moss, Malcolm

      Fookes, Dame Janet

      Moynihan, Hon Colin

      Fowler, Rt Hon Sir Norman

      Neale, Sir Gerrard

      Fox, Sir Marcus

      Nelson, Anthony

      Franks, Cecil

      Neubert, Sir Michael

      French, Douglas

      Newton, Rt Hon Tony

      Fry, Peter

      Nicholls, Patrick

      Gale, Roger

      Nicholson, David (Taunton)

      Gardiner, Sir George

      Onslow, Rt Hon Cranley

      Gilmour, Rt Hon Sir Ian

      Oppenheim, Phillip

      Glyn, Dr Sir Alan

      Owen, Rt Hon Dr David

      Goodlad, Alastair

      Page, Richard

      Goodson-Wickes, Dr Charles

      Paice, James

      Gorman, Mrs Teresa

      Pawsey, James

      Gorst, John

      Porter, David (Waveney)

      Grant, Sir Anthony (CambsSW)

      Price, Sir David

      Greenway, Harry (Ealing N)

      Raffan, Keith

      Greenway, John (Ryedale)

      Raison, Rt Hon Sir Timothy

      Gregory, Conal

      Renton, Rt Hon Tim

      Griffiths, Peter (Portsmouth N)

      Rhodes James, Sir Robert

      Grist, Ian

      Riddick, Graham

      Grylls, Michael

      Ridley, Rt Hon Nicholas

      Hannam, John

      Roberts, Rt Hon Sir Wyn

      Hargreaves, Ken (Hyndburn)

      Rossi, Sir Hugh

      Harris, David

      Ryder, Rt Hon Richard

      Hayhoe, Rt Hon Sir Barney

      Sackville, Hon Tom

      Hayward, Robert

      Sainsbury, Hon Tim

      Heathcoat-Amory, David

      Sayeed, Jonathan

      Higgins, Rt Hon Terence L.

      Scott, Rt Hon Nicholas

      Hill, James

      Shaw, David (Dover)

      Hogg, Hon Douglas (Gr'th'm)

      Shelton, Sir William

      Hordern, Sir Peter

      Shephard, Mrs G. (Norfolk SW)

      Howard, Rt Hon Michael

      Shepherd, Colin (Hereford)

      Howarth, Alan (Strat'd-on-A)

      Shepherd, Richard (Aldridge)

      Howarth, G. (Cannock & B'wd)

      Smith, Tim (Beaconsfield)

      Howell, Ralph (North Norfolk)

      Smyth, Rev Martin (Belfast S)

      Hughes, Robert G. (Harrow W)

      Speller, Tony

      Hunt, Rt Hon David

      Spicer, Sir Jim (Dorset W)

      Hunt, Sir John (Ravensbourne)

      Spicer, Michael (S Worcs)

      Hunter, Andrew

      Squire, Robin

      Irvine, Michael

      Steen, Anthony

      Jack, Michael

      Stevens, Lewis

      Jackson, Robert

      Stewart, Allan (Eastwood)

      Janman, Tim

      Stewart, Andy (Sherwood)

      Jessel, Toby

      Stewart, Rt Hon Sir Ian

      Jopling, Rt Hon Michael

      Sumberg, David

      Key, Robert

      Summerson, Hugo

      King, Roger (B'ham N'thfield)

      Taylor, Ian (Esher)

      King, Rt Hon Tom (Bridgwater)

      Taylor, John M (Solihull)

      Kirkhope, Timothy

      Taylor, Sir Teddy

      Knight, Greg (Derby North)

      Temple-Morris, Peter

      Lawrence, Ivan

      Thompson, Patrick (Norwich N)

      Leigh, Edward (Gainsbor'gh)

      Thorne, Neil

      Lester, Jim (Broxtowe)

      Townend, John (Bridlington)

      Lightbown, David

      Tracey, Richard

      Lloyd, Sir Ian (Havant)

      Twinn, Dr Ian

      Lord, Michael

      Viggers, Peter

      MacGregor, Rt Hon John

      Walden, George

      MacKay, Andrew (E Berkshire)

      Walker, Bill (T'side North)

      Maclean, David

      Waller, Gary

      McNair-Wilson, Sir Michael

      Wardle, Charles (Bexhill)

      Mans, Keith

      Warren, Kenneth

      Marland, Paul

      Wells, Bowen

      Mates, Michael

      Wheeler, Sir John

      Maxwell-Hyslop, Robin

      Widdecombe, Ann

      Mayhew, Rt Hon Sir Patrick

      Wilkinson, John

      Miller, Sir Hal

      Wilshire, David

      Mills, Iain

      Winterton, Mrs Ann

      Miscampbell, Norman

      Wood, Timothy

      Mitchell, Andrew (Gedling)

      Woodcock, Dr. Mike

      Moate, Roger

      Young, Sir George (Acton)

      Molyneaux, Rt Hon James

      Montgomery, Sir Fergus

      Tellers for the Noes:

      Morris, M (N'hampton S)

      Mr. Sydney Chapman and

      Morrison, Sir Charles

      Mr. Irvine Patnick.

      Question accordingly negatived.
      Lords amendment agreed to.
      Mr. Terry Lewis: On a point of order, Mr. Deputy Speaker. You will recall that there has been some controversy in the last day or two over an invitation by the North-West regional health authority to Conservative Members to briefings on how to minimise political damage in the marginal constituencies in the north-west. It has been said that Labour Members from the north-west were also invited. The chief executive of the North-west regional health authority said on the radio at 5 o'clock that north-west Labour Members of Parliament have not responded to letters. That is a downright outrageous lie.
      Mr. Deputy Speaker (Mr. Harold Walker): Order. That has nothing to do with me.
      Mr. Lewis: I wonder whether the Minister—
      Mr. Deputy Speaker: Order. It has nothing at all to do with me.
      Mr. Tony Lloyd: On a point of order, Mr. Deputy Speaker.
      Mr. Deputy Speaker: I hope that it is.
      Mr. Lloyd: It is, and it is directed at you. In matters of parliamentary privilege, where, for example, the authority of Parliament, its Ministers and through them the civil service are being used in a partial manner with respect to some hon. Members —Conservative Members vis-a-vis Labour Members—have you the power to demand that a Minister comes to the House to explain why his civil servants and appointees have behaved in a cavalier political fashion?
      Mr. Deputy Speaker: The well established procedure for dealing with matters of privilege is triggered by writing to Mr. Speaker.

    Clause 13

      THE EXPORT CREDITS GUARANTEE DEPARTMENT AND THE EXPORT GUARANTEES ADVISORY COUNCIL
      Lords amendment: No. 2, in page 7, line 40, at end insert—
      ("(4) In exercising his duty under section 11(1A) of this Act, the Secretary of State shall consult the Export Guarantees Advisory Council.")
      Read a Second time.
      Ms. Quin: I beg to move amendment (e) to the Lords amendment, in line 4, at end add
      'and shall be obliged to consult the Council in the exercise of his duty under that subsection if so requested by the Council'.
      The amendment strengthens the Lords amendment and places on the Secretary of State an obligation to consult the Export Guarantees Advisory Council if the council so requests. That is in addition to the Secretary of State's obligation under the Lords amendment.
      Our amendment would allow the Export Guarantees Advisory Council to institute consultation rather than simply waiting for the Secretary of State to begin consultation with the council. We tabled the amendment because we felt that exporters might be worried that their views would be ignored by the Government.
      There have been plenty of examples during the passage of the Bill and in recent industrial and economic legislation of exporters being ignored. Our amendment strengthens
      828
      the Lords amendment. We feel that it is useful because the Export Guarantees Advisory Council may well wish the Secretary of State to look again at certain moments at the extent of reinsurance that the Government are willing to provide. Our amendment would enable such consultation to take place at a time deemed appropriate by the council and not only at the moment judged appropriate by the Secretary of State.
      5.30 pm
      We should have liked to widen the Lords amendment to include consultation with representatives of the British exporting community, including organisations such as the British Exporters Association, the Institute of Export and so on. But unfortunately, that is not possible under the terms of the Lords amendment, which refers specifically to the Export Guarantees Advisory Council.
      Perhaps the Minister would be good enough to comment on whether he envisages a formal consultation process with exporters in general and with their representative trade associations. In other words, in exercising his authority under this part of the Bill, does the Minister feel that it would be advisable to consult not only the EGAC but as wide a range as possible of representatives from the exporting and industrial community?
      The reason why we are so keen to strengthen the role of the Export Guarantees Advisory Council is that there is a great need for a watchdog role in this privatisation. In other privatisations, some sort of watchdog authority has been set up, even though its powers may have been disappointing to many of us who believe in strong regulation in the public and the consumers' interest.
      However, the Bill creates what amounts to a private monopoly. We are used to the Government privatising and creating private monopolies. Some sort of regulatory function needs to be strengthened in this privatisation so that exporters and exporting companies, the consumers of the privatised company's services, have an opportunity fully to express their view, especially on the role of the Secretary of State in providing a reinsurance facility to the newly privatised ECGD.
      I stress that the Government are effectively creating a private monopoly. The Minister may say that other export credit insurers may well provide services to the British exporting community. Those exporters include exporting outfits in other European countries which may come to Britain and try to gain business. But perhaps the Minister is not aware of the difficulties that one such company, Hermes, the German export credit insurer, has had in the British market. Those difficulties reinforce our view that the Government have created a private monopoly which other companies will find difficult to challenge.
      I have in front of me a letter that Hermes sent to various people involved in exporting in Britain. It explains that, over several months, Hermes was interested in offering credit insurance to the United Kingdom market, but that, unfortunately, the enormous increase in the number of insolvencies in our economy in recent months meant that it was simply not viable to operate in Britain as it had hopes to do.
      In the letter, Hermes refers to
      "the adverse economical situation of a vast variety of United Kingdom companies".
      That has forced it to examine its current policy portfolio as well as its underwriting practices. That makes it clear

      829
      that, while in theory there may be competitors for NCM —the new privatised company to which the Government have sold part of the ECGD—in practice, especially in the current economic climate, it is unlikely that there will be much in the way of competition. Therefore, the Government have effectively created a private monopoly.
      For that reason, our amendment, which strengthens the role of the Export Guarantees Advisory Council, is important, because it will provide the only watchdog element in the process which could stand up for the customers of this new private monopoly. We are understandably attached to the ideas behind amendment (e) and we hope that the Government will look sympathetically on them.
      We are also worried about what may happen if the new company which takes over the ECGD finds itself in financial difficulties or is tempted to sell out to some other purchaser after a certain period. In such circumstances, it is important that the EGAC should have a watchdog role and that it should be able to oblige the Government to consult it, in addition to responding to the Secretary of State's invitation to meet him to discuss the export situation. It is vital for the EGAC to be fully involved in the process.
      The amendment will also provide one way of overcoming the rather secretive approach of the Department of Trade and Industry to many export insurance activities. If the advisory council is involved, at least that will open out beyond the DTI and via the council into the wider exporting community the debate on how far to provide reinsurance.
      Amendment (e) is modest in the sense that, although it strengthens what the Government propose, it still refers merely to consultation. Obviously, that still does not tie a Secretary of State down, but at least it would mean that those who will he considerably affected by the Secretary of State's exercise of this power will have the chance to make their feelings known. That is why we feel that the amendment is important. We hope that the Government will look sympathetically on it.
      Mr. Sainsbury: The hon. Lady said that we were creating a private monopoly. I hope that she listened carefully enough during our earlier proceedings to recognise that the Insurance Services Group of ECGD, which is being privatised, is not a monopoly now and certainly will not be after privatisation. It is the general expectation of exporters that the level of competition in the market is likely to increase after 1992.
      Interestingly, the hon. Lady referred to the letter from Hermes. The difficulties which that insurance provider has experienced in the British market are solely connected with domestic business and are not connected with export credit insurance. As the hon. Lady knows, the new company will be able to offer insurance in domestic sales after privatisation and therefore will provide a still better service to British exporters. ISG is not a monopoly now and certainly will not be after privatisation. The general expectation is that there will be increased competition. Competition will come not only from other insurers but through exporters using other methods such as forfaiting.
      The hon. Lady referred to her amendment to Lords amendment No. 2 as modest. I find it not so much modest as puzzling. Perhaps I can best demonstrate my
      830
      puzzlement by reading to the House the text of the Bill as it would appear if we accepted the Opposition amendment as well as the Lords amendment. It would read:
      "In exercising his duty under section 11(2) of this Act, the Secretary of State shall consult the Export Guarantees Advisory Council and shall be obliged to consult the council in the exercise of his duty under that subsection, if so requested by the council."
      I do not understand how he shall be required to consult the EGAC and then be obliged also to consult it if he is requested to do so by the council.
      The amendment seems not so much modest as unnecessary. For that reason, amendment (e), which the hon. Lady said was modest and a strengthening of the Lords amendment—I take that to mean that she approves of Lords amendment No. 2—would not have any such effect. Indeed, it would have no consequence at all. The advisory council need not be asked for consultation, because the amendment already says:
      "the Secretary of State shall consult".
      I therefore feel that amendment (e) is redundant.
      As for Lords amendment No. 2, I commend it to the House.
      Like Lords amendment No. I, the amendment is related to the question of the reinsurance support that will be available from the ECGD after the privatisation of the Insurance Services Group. It forms part of the response that we gave to the desire expressed in both Houses for the Government's commitment on the reinsurance to appear on the face of the Bill. It also reflects the call for the Government to consult widely when conducting any future review of that support. We have undertaken to consult exporters generally about matters affecting them.
      Lords amendment No. 2 is extremely straightforward. It simply requires the Secretary of State, when fulfilling his duty under new clause 11(1)(a) to determine the national interest case for providing reinsurance—which we have just discussed—to consult the advisory council. Although the amendment imposes a separate obligation on the Secretary of State, it is inextricably linked with the obligation imposed by new clause 11(1)(a) and is not entirely free-standing.
      The purpose of the amendment is to ensure that, before reaching a conclusion on the need for ECGD reinsurance, the Secretary of State will have had the benefit of advice from the highly respected advisory council. The council's advice is an important resource, which we must use wisely. We must not overlook the fact that membership is honorary and that all the council's members have heavy responsibilities to discharge in industry and the City. We must avoid overburdening them. The Bill places no constraint on the demand for their time; indeed, it introduces some new calls that might be made on that time.
      In practice, the ECGD will call on the council's services when it can be expected to make the most helpful contribution, while avoiding converting the council into a kind of supervisory board—let alone the watchdog suggested by the hon. Member for Gateshead, East (Ms. Quin). I am happy to commend that arrangement to the House. I feel that the requirement for the Secretary of State to consult a valuable body of advisers will strengthen the Bill, and will make it even more helpful to the interests of British exporters.
      Ms. Quin: I have listened carefully to what the Minister has said. Although we approve of Lords amendment

      831
      No. 2, which is an improvement on the previous wording in the Bill, I do not agree with the Minister that our amendment is redundant. We believe that it strengthens the text of the Lords amendment: it gives the advisory council an opportunity to oblige the Secretary of State to consult it at a stage that it—the council—considers appropriate.
      It is really a question of timing. It is possible that the council will have been consulted by the Secretary of State about the provision of reinsurance in certain circumstances, but that the council itself will then deem that those circumstances have changed, and will wish to make further official representations to the Minister. Our amendment would give the council that statutory right; the Lords amendment does not.
      We are convinced that our amendment strengthens the existing wording of the Bill. Given the need to make progress, however, I beg to ask leave to withdraw the amendment.
      Amendment to the Lords amendment, by leave, withdrawn.
      5.45 pm
      Mr. Morgan: I beg to move amendment (f) to the Lords amendment, in line 4, at end add
      'particularly with regard to the principles in accordance with which the Secretary of State shall determine whether any reinsurance may be provided under that section'.
      I am sorry that, for various reasons, some of my hon. Friends who—along with me—tabled the amendment are not present.
      The problem with Lords amendment No. 2 is that there is still an element of "We shall consult if we feel like it." The guiding principle is that the Secretary of State will consult, but only if he considers it right to do so. There is no provision for the advisory council to express dissatisfaction formally with the way in which things are going.
      Clause 13(2) states:
      "There shall continue to be an Export Guarantees Advisory Council."
      That is a good guarantee, but subsection (3) goes on:
      "The function of the Council shall be to give advice to the Secretary of State, at his request".
      If the Secretary of State does not request that advice, the council cannot give it.
      That is not a very good recipe for any kind of exercise of independence or incisiveness by the council. It will not work if matters on the trade front continue to deteriorate, and the level playing field that British exporters are always asking for seems to be tilted further and further away from them because of Government timidity, inactivity and inertia—and all the other qualities that the CBI has cited to describe the Government's approach to long-term support for manufacturing industry. The front pages of today's Times and Financial Times highlight what has been said in a document that is bound to feature extensively for the next six months, or longer, in the run-up to the people's final verdict on 12 disastrous years of the Government's stewardship—if it can be called that—of trade and industry.
      We want to get away from the "when I feel like it" approach that the Secretary of State is reserving for himself. He is setting up a body that is supposed to act as a sounding board, providing a second opinion and guidance from those in the appropriate field to prevent
      832
      him from becoming even more isolated than he is now from the people on the chalk face of exporting. That body, however, cannot move unless he allows it to do so. He can say, "Well, chaps"—and perhaps there will be a statutory lady—"how do you think I am doing? Is it going OK?" If the members of the council reply, "It is not going too badly, Minister; perhaps you should ask us again next year", that will be the way in which matters will continue.
      If, however, the council's members feel that he is going seriously wrong, rumours will reach the Secretary of State, who will say, "I will make absolutely sure that I do not ask them. If I do not ask them, they cannot tell me, and then no adverse report will be made." There will then be no possibility of the matter coming before the House, and no possibility that hon. Members will be told that the advisory council is not at all happy with the way in which the Secretary of State is handling his responsibilities for the provision of reinsurance for the new company.
      Our amendment would ensure that the Secretary of State was required to consult the advisory council about the criteria that will determine whether Government reinsurance for the privatised ISG—reinsurance of a top-up, "national interest" variety—is to continue, or whether it should be eased off gradually. In the latter event, it must be established whether it is being eased off in a way that disadvantages those involved in exporting, in export finance or in export insurance.
      Without the amendment, the Government will determine their criteria without the possibility of challenge, unless they choose benevolently to submit themselves to possible criticism from the council. That is not good enough, simply because the Government have been unwilling to lay out the criteria for top-up insurance. They have therefore earned considerable mistrust, as is evident from today's CBI report.
      A two-way relationship is needed, with the Secretary of State being able to consult the advisory council and the advisory council being able to consult the Secretary of State. It must not be a one-way street, for that would confirm all the worst aspects of the deterioration in relationships between the DTI and trade and industry. We want to make sure that the advisory council can come back at the Government if it thinks that things are going the wrong way. The Government will then have to respond constructively to the council's criticisms and will be able to steer the DTI back on to the right course so that industry does not feel that it has been let down. It has been let down in the past and it is being let down at present. It may be let down in the future by the DTI without our amendment. That would be insupportable, if we are to recover our position as a major trading nation.
      Mr. Sainsbury: As we heard to our delight on many occasions during the Committee proceedings on the Bill, the hon. Member for Cardiff, West (Mr. Morgan) has once again been carried away by the exuberance of his own verbosity. I fear that he was carried so far away that he forgot what it was that he was putting to the House by way of an amendment.
      The hon. Gentleman said that consultation was a two-way street. My impression—I suspect that it is widely supported in the House—is that the Secretary of State is responsible for his decisions and is answerable to the House for them. I do not therefore see how the Export Guarantees Advisory Council could consult the Secretary of State. It is not the responsible body. As I explained

      833
      when we discussed the previous amendment, its role is to give advice from its great knowledge and background experience of exporting to the Secretary of State, who is the person with the responsibility, who has to take the decisions and who is answerable to the House.
      Mr. Morgan: The point that I made was that, without our amendment, it will be a one-way street. The Secretary of State needs to consult the council only when he feels like it. That is hardly a healthy relationship. There is no possibility of the council approaching the Secretary of State and saying, "We wish to be consulted, because things are going wrong and we want you to put them right."
      As the Secretary of State for Trade and Industry will seek to avoid embarrassment when things are going wrong, he will avoid consulting the council. The council will then have to remain silent. The council will be of no value, except when things are going well, when it does not need to be consulted. What is the Minister's answer?
      Mr. Sainsbury: I was pointing out that it is the Secretary of State who has responsibility and who is answerable to the House. The hon. Gentleman's amendment refers to consultation
      "particularly with regard to the principles in accordance with which the Secretary of State shall determine whether any reinsurance may be provided under that section."
      We are discussing a Lords amendment—with which the hon. Member for Gateshead, East (Ms. Quin) says the Opposition agree—which places an obligation on the Secretary of State to consult the Export Guarantees Advisory Council. He will consult, when appropriate, on a broad range of issues. I have no doubt that the council will make the Secretary of State aware of its views on any matter of which it believes he ought to be aware. Moreover, the council consists of individuals with considerable experience of industry, banking, financial services and exporting. As people in senior positions, they will have other opportunities to make their views known, perhaps through other organisations.
      834
      We shall continue, as we do now, to consult widely and to listen carefully to the views of industry, in particular to the views of exporters. It is not practicable for the Secretary of State to be asked to delegate to another organisation the determination of the principles on which he will base his decisions. He will have to take into account a wide range of issues. The role of the advisory council is, as it has always been, to assist the Secretary of State by bringing its financial and commercial knowledge to bear upon the ECGD's business.
      The hon. Gentleman referred to setting up a body. I remind him that the Export Guarantees Advisory Council has been in existence for a long time. Its members have always been appointed from industry and financial services. As I said before, we do not want to overburden them. They will be consulted, as required by the previous amendment. They will have every opportunity to put forward their views on all relevant issues. Their advice will continue to be of value to the Secretary of State.
      The Secretary of State will continue, as he does now, to support the work of British exporters, not only in the ways to which I have referred but through the continuing work of the Export Credits Guarantee Department. In addition to the 2,000 staff to whom I have referred, he will have the services of all the excellent and experienced staff of that department. British exporters will continue to have the services of the ECGD, and also the services provided by a privatised Insurance Services Group, based in Cardiff, which is known for its expertise and skill and for the excellent service that it now provides for British exporters. As the hon. Gentleman well knows, as a result of privatisation it will be able to provide a still better and a more flexible and responsive service to help British exporters to continue to achieve the excellent results that they have already achieved, as announced today, but which seldom, if ever, are praised from the Opposition Front Bench.
      Amendment to the Lords amendment negatived.
      Lords amendment agreed to.

      Manchester Airport
      Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodlad.]
      5.57 pm
      Sir Fergus Montgomery: It is a refreshing change for an Adjournment debate to be held as early as this. Whenever I have had an Adjournment debate in the past, it has been in the early hours of the morning.
      The subject that I want to raise is the second runway at Manchester airport which is causing great concern in my constituency. Ever since I was elected as Member of Parliament for Altrincham and Sale I have supported Manchester airport, for a variety of reasons. It is of great value to the north-west region. The airport is also the largest single employer in my constituency. If anything drastic were to happen at the airport and employment there were to drop, it would have a devastating effect on my constituents.
      In particular, I have supported over the years more scheduled international flights. I could never understand why passengers from the north of England had to take the shuttle down to London and change aeroplanes in order to get to their final destination. I have always felt that, as long as airlines were prepared to fly passengers direct, and provided that there was sufficient demand, this was nonsense. I encouraged more scheduled flights because they fly during the day at more civilised times, unlike charter flights, which often take place during the night and cause residents in the area to complain.
      Recently, the airport published its development strategy to the year 2005. To say that that has caused a stir in the area around the airport would be a classic understatement. It has caused a great deal of concern.
      Protest groups have been formed, protest meetings have taken place and countless letters of protest have been written. People have written to me blaming not only the Government, but the Conservative party, for the problems. I hope that my hon. Friend the Minister will disabuse them of that false notion. The airport is controlled not by the Government, but by a board that consists of three professionals, nine councillors from Manchester city council, and one councillor from each of the nine district councils that made up the former Greater Manchester council. Of all those councillors, only one is a Conservative.
      I regret the personal attacks that have been made on the airport's chief executive, Mr. Gil Thompson. He does not make the decisions; as chief executive he carries out the decisions made by the board. People have a right to put their case fairly and squarely, but to descend to personal abuse is unforgivable.
      The development strategy to the year 2005 proposes the construction of a second runway by 1998. Three options have been suggested. Some people suggest that the reason for there being three options is to cause dissent in the area and to pit one group against another. That is not true. Three options were suggested because this is a consultative period and the board feels that it must put forward options that it thinks might be viable. I am most concerned about option 2—the option that is causing the greatest anxiety in my area —because the runway would be sited close to a built-up area.
      Mr. Alfred Morris: As the hon. Gentleman knows, Manchester airport is in my constituency. Over the years, he and I have participated in debates about the future of the airport. As he said, this is a consultation period, and it will last for some time yet. It is essential that all points of view are fully stated and considered. It may not be decided to proceed with any of the options, but if it is decided to proceed with any one of them, there will have to be a planning application and a public inquiry. We must make it clear to people that we are at the very beginning of a long consultation period.
      As I am sure the hon. Gentleman knows, there is a great deal of concern about the threat of privatisation of the airport. It is felt that if that were to happen, environmental factors would go through the window and the airport could be controlled from Tokyo, Wall street or the City of London, and that local influence and authority would disappear. I am sure that the hon. Gentleman appreciates that concern.
      Sir Fergus Montgomery: I agree with the first part of the right hon. Gentleman's remarks, but if I had known that he intended to talk about privatisation, I might not have given way to him.
      The airport tries to maintain a good neighbour policy, and any complaints that I have taken to it on behalf of constituents have been sympathetically treated. The airport operates a series of policies in an effort to help those who are adversely affected. It has a noise insulation grant scheme, it imposes fines on noisy aircraft, it has installed equipment to monitor whether aircraft keep to flight paths, and it will begin to fine aircraft that do not. After its efforts last year, the airport was awarded the north-west "Golden Lear' award because it was the business doing the most to limit the environmental impact of its operations in the north-west. The airport has quite a good record.
      The argument that is now raging is whether a second runway at Manchester is essential. First, it is argued that a second runway is needed because of maintenance or disruption to the existing runway. Secondly, the airport is claiming that future demand in the area will require a second runway and it has produced figures to substantiate its claim. However, at protest meetings and in the letters that the right hon. Gentleman and I have received, Gatwick is always cited as an example of an airport that has only one runway, yet still manages to cope with more passengers and more aircraft movements than Manchester.
      Some figures supplied by a local resident compare the numbers of passenger and aircraft movements for Manchester and for Gatwick. For the year ending 31 December 1990, Manchester handled 10·8 million passengers, while Gatwick handled 21 million. It is estimated that, by the year 2000, Manchester will handle 22 million and Gatwick 30 million. For that same year, Manchester handled 123,000 aircraft movements, while Gatwick handled 189,000. It is estimated that, by 1995, Manchester will handle 172,000 and Gatwick 200,000.
      People say that Gatwick, which does more business than Manchester, manages with a single runway—so why the need for a second runway at Manchester? That fact has had a great impact on people who oppose a second runway. The other constant theme in the letters that I have received is that people feel that the issue should be dealt with as a regional problem. They believe that a regional

      837
      study should be undertaken to identify where passenger traffic originates—in the whole of the north of England, not just in the Manchester area—in the hope that some traffic could be diverted for the mutual benefit of the north of England as a whole. I hope that the idea of a regional survey will be considered in conjunction with the continuing consideration of runway capacity in the south-east. It is vital, in the national interest, to ensure that maximum use is made of regional airports, consistent with the demand that they can attract.
      Another point that needs clarifying is whether there should be greater co-operation between the airports of Manchester and Liverpool. Again, one of the themes running through the letters of constituents is that, if more jobs are to be created, it might be more sensible to create them in Liverpool where they are more greatly needed. On the other hand, Manchester airport has published research carried out by the Henley centre, which claims:
      "We are able to give an unequivocal response. From a carrier perspective, a passenger perspective and for the economic good of the region as a whole, it would be better to develop a second runway at Manchester, rather than redevelop Speke as a major international airport."
      We therefore have two conflicting views, to which I hope my hon. Friend the Minister will give some thought.
      The problem appears to relate to how near people live to the airport. Those who live a fair distance away are in favour of more development because that would mean more jobs and greater prosperity in the area. Those who live close to the airports or under the flight path do not have quite the same enthusiasm for expansion. My constituents have written to me expressing concern about the increase in pollution and noise that a second runway would generate, even with double glazing. I am told that, when the weather is hot and they need to open their windows to get some cool air in the evening, the noise makes that unpleasant for them. When people sit in their gardens talking, they have to stop because they cannot be heard above the noise of passing aircraft.
      My constituents are concerned about the environmental damage that would occur in Bollin valley. They are worried about the congestion on local roads that would be caused by the additional cars that would be used in the area and they are especially concerned about the effects on the already overcrowded M56.
      I wish to mention one novel suggestion passed to me —that everyone who uses Manchester airport should pay £1 tax. The money collected—this year, it would have amounted to about £11 million—could be placed in a separate fund and used to bring about improvements for those who suffer nuisance from the activities of the airport.
      I should be grateful if my hon. Friend the Minister could give some idea of the procedures that will be followed. That point was made by the right hon. Member for Manchester, Wythenshawe (Mr. Morris). I can only assume that he must have read the end of my speech because he used almost the same words that I shall use.
      As I understand it, the airport board will either say before Christmas that there will not be a second runway or it will advance a preferred option. If it does the latter, it will have to make a planning application to the relevant local authority. I am told that that would most likely be made at the end of 1993. The Secretary of State would call in the application and a public inquiry with an independent inspector would he held in 1994 and 1995.
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      That process is essential, because it will allow objectors to put their case publicly and will ensure that their arguments are fairly considered before a final decision is taken.
      I hope that the airport will give my constituents a lovely Christmas present. I have always supported the airport, but plans for expansion must take into account the concerns of local residents. There is no way in which I could support growth at any price.
      6.10 pm
      The Parliamentary Under-Secretary of State for Transport (Mr. Patrick McLoughlin): I begin by congratulating my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) on securing a second Adjournment debate on Manchester airport within a short period. As we are talking about one of the top 20 airports in the world, the time is well spent. I confirm the point that he made about the airport not being controlled by the Government—far from it, as he made clear.
      The right hon. Member for Manchester, Wythenshawe (Mr. Morris), in whose constituency the airport is located, made a valid point about the overall context and importance of the airport. I am sorry that he diverted into the realms of privatisation. If any privatisation proposals are made, we shall debate them in more detail on a later occasion. I should prefer not to debate them now, as I am pressed for time, but our experience of companies that have been privatised is that there has been no dereliction of duty.
      One of the objectives that the Government had in mind when the largest local authority airports were reconstructed as companies under the Airports Act 1986 was that they should think and plan ahead as businesses. That involves them in considering the financing of airport activities, but as important is the preparation of strategies for the development of their airports so that the public can be consulted and so that the environmental implications can be considered in good time.
      Manchester was in the forefront of creating an airport company and it has been in the lead in preparing development strategies and in public involvement. Its existing strategy, prepared in 1987, covers the period to 1995. The airport company has now published a draft of the fourth development strategy that will cover the period to 2005. It is right that the company should set out its proposals and the rationale for them. Although we recognise that the options that the draft contains may cause severe concerns to some of the people living near the airport, others will be encouraged by the prospect of the greater opportunities that these proposals represent.
      The airport is well known as a major source of employment for the region. There are more than 150 companies at the airport, employing almost 10,000 people. An additional 15,000 jobs in the region are dependent on the airport.
      Mr. Alfred Morris: It employs more than 10,000 directly at the airport.
      Mr. McLoughlin: The right hon. Gentleman says that it is more than 10,000. It is certainly a vibrant part of Manchester.
      I said only last week in reply to my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) that passenger numbers at the airport had increased from 3·4 million in 1979 to more than 10 million in 1990. For

      839
      several years in succession, Manchester has been Europe's fastest expanding airport. The airport company forecasts that passenger numbers will increase to 16 million in 1995, to 22 million in the year 2000 and beyond that.
      Translating such figures into requirements for terminal and runway capacity is not as straightforward as it may seem because of the uncertainties about aircraft sizes, the mix between schedule and charter traffic and the amount of hub traffic that is expected, but Manchester forecasts that demand during the morning peak period in 1995 will be equivalent to about 60 aircraft movements per hour, compared with the existing capacity of between 41 or 42 movements.
      In the short term, it may be possible to constrain demand by measures such as pricing and liaison on airline schedules. The airport company plans to carry out work to the runway and to the taxiway system to maximise the capacity of the existing runways, but it is concerned that, by the time that passengers levels reach about 18 million, which they are expected to reach in the late 1990s, it will have to turn traffic away because of the shortage of peak-time slots. That is the background to the airport company's proposal to construct a second runway.
      I agree with my hon. Friend the Member for Altrincham and Sale about the need for local people to be able to use their own local airport. I wish that we could think of another name for regional airports. It is unfair to describe Manchester, Birmingham or other airports as regional airports—they are major airports. Manchester is the third largest airport in the United Kingdom and it is wrong to describe it as a regional airport.
      We received a report from the CAA on airport capacity —document CAP 570. We have established a broadly based working group to take forward and to build on the CAA's advice in CAP 570. In considering the south-east area's capacity, it will take full account of the important contributions that regional airports can make to meeting overall growth in demand. The group is testing the CAA's findings that although traffic at regional airports will continue to grow strongly, development at these airports would not provide an effective substitute for additional capacity in the south-east. Indeed, the report stated that we would need to look for a new runway in the south-east by 2005. We are taking advice on the problem in the south-east.
      The working group has established a sub-group specifically to consider those important regional issues. It is chaired by a representative of the Joint Airports Committee of Local Authorities, which is making a substantial and valuable contribution to the group's work. I look forward to learning the results of its studies.
      My hon. Friend the Member for Altrincham and Sale mentioned Liverpool. I have no doubt that there is room for development at Liverpool airport, but its owner—British Aerospace—must decide whether to seek an accommodation with Manchester. It cannot be ignored, however, that by some margin Manchester is the third biggest airport in the United Kingdom. It is a substantial regional airport which provides a wide range of international services for the business traveller and holidaymaker, covering about 140 destinations. It will want to pursue the development in a way that seems most appropriate to its commercial operations.
      840
      Accordingly, Manchester is formulating its own plans to meet the demand being generated within its catchment area. Twenty million people and 60 per cent. of the United Kingdom's manufacturing industry are located within two hours drive of the airport. The CAA's advice in CAP 570 contains traffic projections for Manchester that are broadly comparable to those that the airport company has recently produced. Moreover, the CAA concluded there would be a need for a new runway to serve the north-west and, prima facie, a site in the Manchester area was indicated. The airport company's evaluation of potential runway options has been carried out in conjunction with the CAA to ensure a robust analysis compatible with national air traffic planning. An initial study by the company shows that a second runway could be integrated into the air traffic system both regionally and nationally.
      My hon. Friend the Member for Altrincham and Sale will not expect detailed views from me today on the three areas of search for a second runway contained in the draft development strategy. The airport company has rightly set out the options and invited comments on them. It has also given an undertaking that it will announce its preferred option before Christmas. I join my hon. Friend in hoping that there will be no slippage in that announcement. We are all aware of the uncertainty that proposed major developments have caused. Therefore, the sooner that uncertainty is ended the better. The undertaking is important to end the uncertainty that the possibility of large-scale airport development inevitably creates.
      Some of this uncertainty relates to the differing noise effects which local residents may suffer directly from the various options. There is also more general concern about aircraft noise as an environmental issue, together with concern about landscape and air and water quality. Manchester airport lies in attractive open countryside, within the green belt and close to residential communities. At the same time, its development is closely related to our aviation liberalisation policies and to our achievements since 1979 in regenerating the economy of the north-west. The airport company recognises that it has a particularly difficult task in balancing the claims of development and the environment.
      Noise abatement measures are generally the responsibility of the owners or operators of airports. We believe that these local matters are best discussed and resolved locally, but we expect owners or operators to reduce the disturbance caused by their operations so far as is practicable and reasonable. We also believe that Manchester airport is taking its environmental responsibilities seriously—for example, its noise and track-keeping system and its contribution to research on sleep disturbance.
      One cannot completely overcome noise problems, but the airport company is doing what it can reasonably be expected to do to mitigate the effects. That can be achieved without recourse to new taxation. My hon. Friend the Member for Altrincham and Sale would not wish us to follow through that suggestion which his constituents may have made, but I accept the specific points that have been made about people using the airport and the impact on the locality. This matter can best be addressed by the airport, without introducing new taxation. New taxation would set a precedent for other airports, which I am not sure we would welcome.
      The Government, too, are playing an active role in reducing aircraft noise. The United Kingdom played a

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      major part last year in securing worldwide agreement within the International Civil Aviation Organisation to ban the older, noisier, chapter 2 types of aircraft between 1995 and the year 2002. A European Community directive on the subject will be incorporated into United Kingdom legislation. On current forecasts, the phasing out of noisier jets will improve the noise environment around airports, even with projected increases in traffic.
      Noise will, of course, be one of the factors covered in the environmental impact assessment which will accompany the airport's planning application for its preferred choice of runway site. It hopes to reach that stage by 1993. Consideration of the issues would then be a matter for the planning system in the normal way. My hon. Friend the Member for Altrincham and Sale and the right hon. Member for Wythenshawe said that they would campaign vigorously to have applications called in. Whether an application should be called in is a matter for my right hon. Friend the Secretary of State for the environment to determine in the circumstances that exist at the time. The Government's general approach is not to interfere with the jurisdiction of local planning authorities unless that is necessary.
      In general, cases are called in only if planning issues of more than local importance are involved—for example, those that have wide effects beyond the immediate locality, those that give rise to substantial regional or national controversy, those that may conflict with national policy on important matters and those where the interests of national security of foreign Governments may be involved. There is a fairly wide definition. I am sure that it would not be beyond the ability of my hon. Friend the Member for Altrincham and Sale to make a strong case for consideration by my right hon. Friend the Secretary of State.
      There are no easy solutions in building a runway. In many debates, hon. Members on both sides of the House have agreed with the need for additional runway capacity. However, there are always differences over where that extra capacity should be. One of the most memorable of those occasions occurred when the House debated the findings of CAP 570. My hon. Friends said that a new runway was essential, but they then explained why it should not be at the airport closest to their constituencies. It is a difficult decision and we face great difficulties in dealing with applications.
      We have no control over the airport. As my hon. Friend the Member for Altrincham and Sale pointed out, the company is controlled by local councillors in the main and by three executive officers. I am sorry to hear about personal attacks on Gil Thompson, whom I respect and to
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      whom I have listened. I am disturbed to hear of personal attacks on someone who is doing a professional job. It is unfortunate if such things happen and would not serve any purpose.
      Over the past 10 years, through the Government's liberalisation policies, the tremendous growth in regional airports has brought tremendous benefits to the people living in those areas. They do not necessarily have to travel to the south-east to get a flight. The important changes that have occurred have been generally welcomed, because those airports have provided new hubs for business. In 1979, just over 3 million passengers used Manchester airport, the number has grown to more than 10 million. Many people are directly employed by the airport.
      Mr. Stephen Day: I wish to make it clear to my hon. Friend that Manchester airport is recognised as an asset for the region. The problem is that, in Cheadle, my constituents have been asked to face the prospect of not only a second runway but night flights.
      Mr. McLoughlin: I thank my hon. Friend. Those are important points. My hon. Friends the Members for Cheadle and for Altrincham and Sale have stressed the importance of achieving a balance between expansion and environmental considerations, such as noise abatement. There are no easy solutions, but it is right that Manchester airport has formulated a long-term strategy and is [consulting the public about it. We need to —
      It being not later than half an hour after the motion had been made, MR. DEPUTY SPEAKER suspended the Sitting, pursuant to Order [18 October.]
      Sitting suspended at 6.27 pm.
      7.24 pm
      MR. SPEAKER resumed the Chair.
      Message to attend the Lords Commissioners:
      The House went:—and, having returned:

      Royal Assent
      7.50 pm
      Mr. Speaker: I have to acquaint the House that the House has been to the House of Peers where a Commission under the Great Seal was read, authorising the Royal Assent to the following:

      British Technololgy Group Act 1991

      Export and Investment Guarantees Act 1991

      Greater Manchester (Light Rapid Transit System) (No. 5) Act 1991

      Birmingham City Council Act 1991.

  Prorogation

    Her Majesty's Most Gracious Speech
    Mr. Speaker: I have further to acquaint the House that the Lord High Chancellor, one of the Lord Commissioners, delivered Her Majesty's Most Gracious Speech to both Houses of Parliament, in pursuance of Her Majesty's Command. For greater accuracy, I have obtained a copy and also directed that the terms of the speech be printed in the Votes and Proceedings. Copies are being made available in the Vote Office.
    The Gracious Speech was as follows:
    My Lords and Members of the House of Commons
    The Duke of Edinburgh and I were pleased to receive the State Visits of His Excellency the President of the Republic of Poland and Mrs. Walesa in April and His Excellency the President of the Arab Republic of Egypt and Mrs. Mubarak in July.
    We recall with pleasure our State Visit to the United States of America in June. We remember with satisfaction our State Visits to Namibia and Zimbabwe in October, where I was also present on the occasion of the Commonwealth Heads of Government Meeting.
    My Government played a full and vigorous part in the action taken by the United Nations and the international community to eject Iraqi forces from Kuwait and to restore that country's independence and legitimate government, and in setting up a Compensation Fund for those who suffered following Iraq's invasion. They responded rapidly to the Iraqi Government's persecution of their own people. They have made it clear that Iraq cannot resume its place in the international community while the present government remain in power.
    My Government have continued to make a substantial contribution to the North Atlantic Treaty Organisation, and otherwise to maintain provision for national defence commitments. They have welcomed improvements in the security situation in Europe and are participating fully in adapting the Alliance, including the development of a stronger European defence identity in the Western European Union. They have announced proposals to restructure Britain's defences to reflect changing international circumstances.
    My Government hosted the successful Economic Summit in July and the subsequent historic meeting between Summit leaders and President Gorbachev of the Soviet Union. Following the Summit, My Government vigorously denounced the attempted coup in the Soviet Union, and supported President Yeltsin's courageous stand against it. They have been working actively to encourage the integration of the Soviet Union and its Republics into the international economy. My Government welcomed warmly the return to independence of Estonia, Latvia and Lithuania.
    My Government have continued to work for balanced and verifiable arms control agreements. They played an important part in concluding the Treaty on Conventional Armed Forces in Europe, and in the Third Review Conference of the Biological and Toxic Weapons Convention.
    My Government have played a full part in the development of the Conference on Security and Co-operation in Europe. They have worked actively for new mechanisms for maintaining stability in Europe.
    My Government have continued to work towards the Single European Market. They have participated fully in negotiations in the Inter-Governmental Conferences on political union and economic and monetary union. They have supported the development of the Community's relations with other European nations. They have, with our European partners, concluded joint declarations with the United States, Canada and Japan; and economic and financial agreements with Asia, Latin America and the Mediterranean non-member countries.
    My Government welcomed the inaugural meeting of the European Bank for Reconstruction and Development in London in April. They have continued their active support for democratic change in Eastern Europe.
    My Government's commitment to strengthening the United Nations was reflected in the Political Declaration issued by the London Economic Summit.
    My Government have maintained a substantial and effective overseas aid programme to assist developing countries.
    My Government welcomed progress towards democratic government in Africa, and towards the end of apartheid in South Africa. They have worked strenuously for the prosperity and stability of Hong Kong. They have welcomed the continuing progress in Latin America towards democracy and market economies.
    My Government have continued their sustained efforts to combat terrorism in the United Kingdom and elsewhere. They welcomed the recent release of hostages from Lebanon and have maintained their efforts to obtain the release of all remaining hostages in the Middle East.
    My Government ratified the 1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and have played a full part in establishing the United Nations International Drugs Control Programme. They concluded agreements to confiscate drug traffickers' funds with seven governments.
    My Government welcomed the agreement of the consultative parties to an environmental protocol to the Antarctic Treaty.
    Members of the House of Commons
    I thank you for the provision which you have made for the honour and dignity of the Crown and for the public service.
    My Lords and Members of the House of Commons
    My Government have pursued firm financial policies which have reduced inflation sharply and laid the foundations for the resumption of sustained growth. The pound sterling has remained well within its band in the Exchange Rate Mechanism.
    My Government have further reduced the rate of Corporation Tax and made a number of changes to the tax system to benefit businesses. They have introduced additional measures to help unemployed people return to work.
    As part of My Government's privatisation pro-gramme, the electricity supply industry in Great Britain has been restructured and shares in the companies sold.
    The Citizen's Charter White Paper set out My Government's policies for improving the quality of public

    845
    services through increased choice, better value for money and stronger accountability.
    Legislation has been enacted to establish a School Teachers' Review Body for England and Wales.
    My Government have implemented reforms of the National Health Service, and announced strategies for improving health. They have implemented the Children Act.
    An Act has been passed to improve the town and country planning system, and the arrangements for compensation for compulsory purchase.
    My Government have continued to work for the regeneration of our cities. New competitive funding initiatives have been introduced to improve the quality of regeneration in priority areas and the renovation and management of local authority housing in England and Wales.
    An Act has been passed to give the Courts jurisdiction to try certain war crimes of the Second World War.
    Legislation has been enacted to improve the administration of criminal justice and the treatment of offenders in England and Wales.
    An Act has been passed to strengthen the law on dangerous dogs.
    Legislation has been enacted to provide new benefits for disabled people and to strengthen parental responsibility for children by improving the assessment, collection and enforcement of maintenance.
    An Act has been passed to improve the arrangements governing coal mining subsidence.
    Legislation has been enacted to encourage private financing of roads and better coordination of street-works; to improve road traffic law and management and to enable trust ports to become publicly-owned companies.
    Legislation has been enacted to enable contractor operation of the Atomic Weapons Establishment, and to provide for the sale of the British Technology Group.
    An Act has been passed to update the powers of the Export and Credit Guarantee Department and to facilitate the sale of the Insurance Services business.
    In Northern Ireland, My Government's efforts to combat terrorism have continued. An Act has been passed to reform anti-terrorist legislation. My Government have continued to encourage political progress by promoting collective talks with the main constitutional Northern Ireland parties. They, have maintained a constructive relationship with the Republic of Ireland under the Anglo-Irish Agreement.
    For Scotland, legislation has provided for a Natural Heritage Agency, to secure an integrated approach to conservation and countryside mutters.
    My Lords and Members of the House of Commons
    I pray that the blessing of Almighty God may attend you.
    Thereafter a Commission for proroguing the Parliament was read, after which the Lord Chancellor said:
    "My Lords and Members of the House of Commons: by virtue of Her Majesty's Commission which has now been read, we do, in Her Majesty's name, and in obedience to Fier Majesty's Commands, prorogue this Parliament to Thursday the thirty-first day of this instant October, to be then her holden, and this Parliament is accordingly prorogued to Thursday the thirty-first day of this instant October."
    End of the Fourth Session (opened on 7 November 1990) of the Fiftieth Parliament of the United Kingdom of Great Britain and Northern Ireland, in the Fortieth Year of the Reign of Her Majesty Queen Elizabeth the Second.